The paper focuses on the issue of transmission loss allocation and transmission loss minimization by incorporating UPFC injection model using load flow analysis. To investigate the effect of the UPFC on the steady state condition of the system and load flow, different models can be used. These models are usually based on modification of traditional load flow methods. In this project, a mathematical model for UPFC referred as UPFC injection model is used. Since accurate power tracing is very difficult, allocation of losses for a particular transaction (in power business it is buying and selling system) may not be effectively realized. However loss allocation is an important aspect in determining the cost of transmission. Thus a methodology to find the losses accurately is vital. It is imperative to make sure that all users of the transmission network are charged proportionate to their usage and this aspect is all the more important because of the common infrastructure they use. The Z-bus loss allocation method is used to achieve the required objective. This method will promote more efficient network operations when implemented in deregulated electric industries. The Unified Power Flow Controller (UPFC) injection model is incorporated in Load Flow Model by the method of Newton Raphson Algorithm to study its effects for power flow control and losses minimization in the power system. In this project optimal placement of UPFC is conducted based on active power loss Sensitivity factors. Based on these sensitivity factors the UPFC is optimally placed in the required transmission line to investigate the impact of UPFC in the system. The changes in the system are studied to see the impact of the UPFC. The impact of UPFC are analyzed by using 5-Bus, IEE
