A Graph-Based Loss Allocation Framework for Transactive Energy Markets in Unbalanced Radial Distribution Networks

Future distributed transactive energy markets are envisioned to integrate multiple entities located mainly at the distribution level of the grid, so that consumers and prosumers can trade power either directly with the upstream wholesale energy market or through local pricing mechanisms (e.g., through “peer-to-peer” contracts or by forming “energy communities”). In such market environments, a transparent loss allocation framework is required to guarantee economic efficiency and fairness. Nevertheless, the unbalanced power flow nature associated with the distribution networks should be fundamentally integrated in the loss allocation process. To this end, this paper presents a graph-based loss allocation framework that harmonizes the physical attributes of the distribution grid with the underlying financial transactions in distributed market settings. The latter is achieved via representing distribution networks as multilayered radial graphs. The proposed loss allocation framework is tested on an actual LV feeder that is experiencing rapid growth in DG applications.