Z‐number‐based negotiation model for determining two‐part transmission tariffs of cross‐regional transmission projects

For cross‐regional transmission projects, the two‐part transmission pricing mechanism is suggested so as to promote the sustainable development of cross‐regional electricity trading. In the two‐part transmission pricing mechanism, appropriately determining the capacity charging ratio (CCR) is an important issue not well solved. Given this background, a Z‐number‐based risk‐minimised negotiation model is developed for a transmission company and a power purchaser to achieve an agreeable CCR under incomplete information. The uncertainty distribution of the future annual electricity transmission quantity is first estimated by the Z‐number‐based multiple Z‐valuations; and then, the benefit and risk loss measured by the well‐established conditional value at risk (CVaR) are analysed for the participating two parties. Subsequently, the negotiation model where each negotiator is to minimise its risk loss under a given lowest acceptable benefit constraint and the estimations of the opponent's risk tolerance and negotiation strategy is presented to determine the optimal offer. Finally, the ± 500 kV Xiluodu−Guangdong direct current (DC) transmission project in the southern region of China is employed to demonstrate the basic characteristics of the proposed model.