Transmission loss and congestion cost allocation - An approach based on responsibility

Optimal re-dispatch to alleviate transmission congestion has been modeled as a nonlinear optimization program. A hyperbolic tangent function in the index of performance permits the dispatch of reactive power based on bids. A new approach to allocate the cost of congestion and losses to the nodes of the transmission network based on the nodes' responsibility is proposed, This approach overcomes some asymmetries of the Locational Marginal Pricing methods.