Real and reactive power wheeling cost based on the marginal cost theory

Wheeling is the transmission of active power and reactive power from one utility to another through the transmission network of a third party. Wheeling rates of active and reactive power are important issues that need to be addressed. This thesis presents a nonlinear optimization model based on the marginal cost theory to set wheeling rates.;Two Case studies have been used to test the model. The first test system consists of an eight bus network. The second case is a practical system of three of the Gulf Cooperation Council states (GCC) of Oman, United Arab Emirates and Qatar. Wheeling rates for the transfer of the power from Oman to Qatar, via the transmission network of UAE, and vice versa has been determined.;The model is a modified Optimal Power flow. The objective function is to minimize the active and reactive power generation costs of the wheeling utility and the capital costs of the wheeling facilities. The model consists of equality and inequality constraints that are non linear in nature. Reactive power generation costs, transmission Losses and transmission line stability limits are included in the model.