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\title{\vspace{-2.1cm}
  Network Flow Allocation: An Overview
}
%\subtitle{---}
\author{
  %\vspace{-0.3cm}
  {\bf Tom  Brown}\\
  %\href{mailto:brown@fias.uni-frankfurt.de}{brown@fias.uni-frankfurt.de}, \url{https://www.nworbmot.org/}\\
  \emph{Frankfurt Institute for Advanced Studies (FIAS), University of Frankfurt}
}



\date{\vspace{0.3cm}FIAS, 16th October 2017}

\titlegraphic{%
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\begin{document}

\maketitle




\begin{frame}{What is flow allocation?}

  \alert{Flow allocation} refers to algorithms that assign the flow of power in electricity network assets (e.g. lines and transformers) to particular users (e.g. generators and consumers).

  \vspace{.3cm}

  \centering
  \includegraphics[width=8.5cm]{line-nodes}

  \source{\href{https://www.iit.comillas.edu/docs/IIT-02-100I.pdf}{Comillas EC report, 2002}}

\end{frame}


\begin{frame}{What is flow allocation?}

  Flow allocation gives a \alert{break-down} of the flow in each asset in terms of the network users.

  \vspace{.3cm}

  \centering
  \includegraphics[width=7.5cm]{marginal_participation_split_gen}

  \source{\href{https://doi.org/10.1049/iet-rpg.2014.0114}{Brown et al, IET, 2014}}

\end{frame}


\begin{frame}{What is flow allocation?}

  \alert{Different algorithms} deliver \alert{different results}, including:
  \begin{itemize}
  \item Assigning fractions of flow on each line to individual generators and consumers
  \item Assigning fractions of flow on each line to pairs of generators and consumers
  \item Matching consumers of power to generators of power via particular paths in the network
  \item Assigning fractions of flows to different groups, e.g. national vs. international, renewable vs. non-renewable
  \end{itemize}

  \vspace{.3cm}

  Some methods may not be suitable in certain circumstances, e.g. for
  HVDC lines or aggregated networks (principally because of cyclic
  flows).

\end{frame}




\begin{frame}{What is flow allocation useful for?}

  Flow allocation can be used to \alert{assign costs} to particular network actors of \dots
  \begin{itemize}
  \item operation and maintenance costs for existing network assets
  \item compensation for network losses
  \item new network assets
  \item grid connection charges for new generators
  \item redispatch
  \item international redispatch (multi-lateral remedial actions (MRAs))
  \end{itemize}

  \alert{Nota Bene}: Most of these use cases would \alert{not} be necessary in a
  market with \alert{nodal pricing} at (partial) \alert{equilibrium}. These use cases compensate for \alert{imperfect market design}.

  Flow allocation can also be used to increase understanding of the network,
  e.g. to increase public acceptance by seeing the source of network flows.

\end{frame}


\begin{frame}{Where is flow allocation currently used?}

  Commission Regulation (EU) No 838/2010 sets the terms for inter-TSO compensation (ITC) in Europe for costs incurred by
  cross-border flows (`transits') for
  \begin{itemize}
  \item \alert{infrastructure usage} (total compensation limited to 100
    million~\euro/a until new metholodogy can be implemented; distributed today using
    transit-load factor `postage stamp' method)
  \item \alert{losses} (total compensation was 153 million~\euro{} in 2015 (losses valued at around 50~\euro/MWh),  assessed using With and Without Transit (WWT) method)
  \end{itemize}

  Flow allocation is also used around the world for cost allocation,
  e.g. in South America, the United States and Great Britain (where it's used for
  the G- and L-components of Transport Network Use of System (TNUoS)). German TSOs also examining using flow allocation for
  MRA cost-sharing.

  %http://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/ITC%20Monitoring%20Report%202016.pdf

  %Losses: valued around 50 EUR/MWh

  %Not all countries agree on method to evaluate the losses

  % the losses related fee is calculated by dividing the WWT (With and Without Transit) Fund size by the sum of  scheduled import and export flows, net import and net export flows; and
\end{frame}


\begin{frame}{Why flow allocation is non-trivial and non-unique}

  There is \alert{no unique} way to do flow allocation. There are
  \alert{ambiguities} both at network junctions and due to multiple
  paths through the network (i.e. closed cycles).

  \vspace{.5cm}

  \begin{columns}
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\end{frame}



\begin{frame}{Why flow allocation is non-trivial and non-unique}

  For example the Bialek \alert{flow tracing method} (also called Average
  Participation (AP)) is like a ``water flow'' and stays relatively
  \alert{localised}:

  \vspace{.3cm}

  \centering
  \includegraphics[width=9cm]{AP-ES-FR}

    \source{\href{https://ec.europa.eu/energy/sites/ener/files/documents/2006_03_tso_compensation_mechanism.pdf}{CONSENTEC, Frontier EC report, 2006}}

\end{frame}




\begin{frame}{Why flow allocation is non-trivial and non-unique}

  Whereas the \alert{power-flow-sensitivity method} (also called Marginal Participation (MP))
  sees effects from nodes \alert{across the network}:

  \vspace{.3cm}

  \centering
  \includegraphics[width=9cm]{MP-ES-FR}

    \source{\href{https://ec.europa.eu/energy/sites/ener/files/documents/2006_03_tso_compensation_mechanism.pdf}{CONSENTEC, Frontier EC report, 2006}}

\end{frame}


\begin{frame}{Why flow allocation is non-trivial and non-unique}

  This results in \alert{very different} assessments of the amount of
  compensation due to each European country for \alert{transit flows} from
  other countries (AP versus MP for 2003):

  \centering
  \includegraphics[width=10cm]{MP-AP-2013}

    \source{\href{https://ec.europa.eu/energy/sites/ener/files/documents/2006_03_tso_compensation_mechanism.pdf}{CONSENTEC, Frontier EC report, 2006}}
\end{frame}



\begin{frame}{Why flow allocation is non-trivial and non-unique}

  They are also \alert{unstable} from year to year (example of MP for 2003 and 2004):


  \centering
  \includegraphics[width=11cm]{MP-2013-2014}

    \source{\href{https://ec.europa.eu/energy/sites/ener/files/documents/2006_03_tso_compensation_mechanism.pdf}{CONSENTEC, Frontier EC report, 2006}}
\end{frame}



\begin{frame}{Why flow allocation is non-trivial and non-unique}


  Therefore it is \alert{no wonder} that in the 7 years since
  Commission Regulation (EU) No 838/2010, there has been \alert{no
    agreement} on a new methodology for inter-TSO compensation.

  \vspace{1cm}

  Private quotation from Midcontinent Independent System Operator (MISO) employee: \\ ``Flow
  allocation is the \alert{single most contentious subject} I've ever
  encountered''.

  \vspace{1cm}


  So: \alert{How to proceed?}



  %\source{\href{https://ec.europa.eu/energy/sites/ener/files/documents/2003_11_cbt.pdf}{Comillas EC report, 2003}}
\end{frame}

\begin{frame}{NET-ALLOK: Towards new methods}

  In the NET-ALLOK project we will not just evaluate existing methods,
  but also develop \alert{new methods}. These will use both physics
  and the \alert{(re)distribution of social welfare}, i.e. identifying
  those consumers and generators who profit from particular
  infrastructure.

  \vspace{.3cm}


  This is in line with existing methods for assessing new projects and
  new market designs, and should be compatible with \alert{long-term
  efficiency}.

  \vspace{.3cm}

  In the second half of the project, the consequences for short-term
  operation and long-term investment decisions will be examined.


\end{frame}


\begin{frame}{NET-ALLOK: Towards new methods}


  \begin{columns}
    \column[c]{.6\textwidth}

    \centering
  \includegraphics[width=8.3cm]{rui}

      \column[c]{.4\textwidth}


  Example: the introduction of new HVDC corridors in Germany would
  cause an increase in average prices in the North and a decrease in
  the South \alert{if} Germany had nodal pricing.

  \vspace{.3cm}

  Generators in the North and consumers in the South profit from this.

  \vspace{.3cm}

  This can be used as a geographical key for distributing the costs of
  the new transmission lines to those who benefit most from them.

  \end{columns}

\end{frame}


\begin{frame}{Copyright}


  Unless otherwise stated, the graphics and text are Copyright \copyright Tom Brown, 2017.


  The graphics and text for which no other attribution are given are licensed under a
  \href{https://creativecommons.org/licenses/by/4.0/}{Creative Commons
  Attribution 4.0 International Licence}.

  \begin{center}\ccby\end{center}

\end{frame}


\end{document}
