In electricity markets, participants utilize the network differently to maximize their profits, which means their effects on the system, such as losses, can also be different. The development of a fair power loss allocation scheme is significant to avoid cross subsidies and to have correct charges for all participants. This paper investigates power losses in bilateral electricity markets operating under light load conditions in which excess reactive power needs to be absorbed to avoid unacceptable high voltage rises. The basic idea of the method used in the paper assumes that transactions have their own effects on the system and their interactive effects with each other. Each transaction share of the network losses depends on its contribution to the system current flows. The method determines these currents contributions using the so-called current adjustment factors. It can easily allocate both real and reactive losses simultaneously. The method is verified on IEEE-14-bus system.
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