Use of system approaches for transmission open access pricing (original) (raw)

Invested Related Pricing for Transmission Use: Drawbacks and Improvements in Brazil

2007 IEEE Lausanne Power Tech, 2007

The deregulation of electrical power sector aimed to introduce market mechanisms and divided the sector in four segments: generation, transmission, distribution and commercialization. Transmission has characteristics of natural monopoly and needs to have economic regulation. The transmission tariffs must collect the transmission allowed revenue (TAR), but the problem is to allocate it among the network users. Brazil adopted the Investment Cost Related Price (ICRP) method to design these tariffs. This method which is applied at Great Britain is based on a proxy of the long-run incremental cost and depends on where the agent is located. It suits well when there is just one big load center, but in the case of Brazil with its continental dimensions and a sparse load center the method has shown some drawbacks. It has been observed that the Brazilian transmission tariff is not producing the desired economic signals for the users of the transmission facilities. This paper shows the main shortcomings of the current method and proposes improvements to adapt to the characteristics of the Brazilian network. The paper also shows the main results with the actual Brazilian system.

An approach for evaluation of transmission costs of real power contracts in deregulated systems

Electric Power Systems Research, 2004

This paper presents a usage-based transmission cost allocation method based on a new set of line utility factors (LUFs), which provides power transaction impact on each element of the network in deregulated power system operation. The developed LUFs relates the line flows with generation/load for a given network configuration. In this paper, a bilateral transaction contract model through a transaction matrix and line utility factors are used to evaluate cost of bilateral power contracts. The proposed method allocates the transaction costs over the participants/contracts proportional to the ratio of power flow caused by each participant/contract and the total power flows on a designated transmission line. The method has been applied on a few sample systems, and the results for sample systems and a real life EHV equivalent system are presented for illustrative purposes. .in (D. Thukaram). the emerging multi-transaction operation accurately and efficiently is quite essential .

Transmission planning-from a market approach to a centralized one-the Chilean experience

2009 IEEE Power & Energy Society General Meeting, 2009

Electricity transmission planning does not have a common solution worldwide, with most countries trusting on alternatives adapted to the local energy markets' regulatory regime. The fast-growing conditions of the Chilean energy market, driven by private agents, meant the need to introduce changes to the original 1982 regulatory framework, being transmission pricing and investment among the main issues assessed in 2004. The original framework based on free market bilateral negotiations among the transmission owner and the interested parties had its main conflicts associated to the lack of transmission investment signals and lack of a common method to value and allocate the use of the existent transmission assets, that provoked a free rider actuation by some agents. For that reason transmission expansion and pricing was modified into a co-operative regulated scheme with participation of every agent participating in the energy market. As a result of the regulatory modifications, investments in the trunk transmission system have reactivated but some improvements to the process must be done.

Comparison of two methods for long-run marginal cost-based transmission use-of-system pricing

IEE Proceedings - Generation, Transmission and Distribution, 2001

Two methods that provide geographically differentiated transmission usage tariffs, based on the long-run marginal cost of transmission, are presented and compared: investment cost-related pricing and the DC load flow pricing. The basic assumptions and approximations behind their design are analysed. Very efficient implementations of both methods, based on sensitivity analysis, are presented. Both methods are applied to the computation of transmission usage tariffs in the Greek power system, and the resulting tariffs are compared. 0 IEE, 200 1 IEE Proceedwigs o n h e no. 20010408

The difficulties of open access and pricing in distribution networks

2007 IEEE Power Engineering Society General Meeting, 2007

Chile has had a successful experience of over 20 years of applying benchmark price regulation to its distribution companies. The same can not be said on implementing open access to the distribution networks, given the vertical integration of the wire business and the retail activity. This summary discusses barriers of entries to third parties that want to compete with the distribution companies and explains the pricing access scheme that has been formulated. 1 I.

Investment in Renewable Transmission Assets: Who pays in the Chilean System?

IEEE PES T&D Latinamerica, 2012

The growth of non-conventional renewable energies involves a new challenge for optimal network expansion. A better integration of renewables will be allowed by determining transmission assets necessary for a reliable, affordable and sustainable operation, and even more important to determine who will pay, and how, the network expansion.

Optimal transmission tariff regulation for the Southern Baja-Californian electricity network system

Investigación Económica, 2017

The tariff imposed over the use of electricity transmission networks is one critical factor to achieve efficiency in electricity markets. In Mexico, the current transmission network tariffs are based on long run marginal costs. We propose an incentive price-cap mechanism and apply it to the meshed network system in the isolated electricity system of Southern Baja California, Mexico. We further compare the current transmission tariffs set by the Mexican regulator (CRE) with the tariffs resulting from our regulatory scheme. We show that our mechanism prices the network at tariffs rendering superior welfare compared to the tariffs determined by Mexican authorities.

Transmission pricing scheme under contingency conditions in open access market

2014 Eighteenth National Power Systems Conference (NPSC), 2014

In the deregulated power system, transmission pricing has become a very important task because it is necessary to develop an efficient, feasible and reliable pricing scheme that can generate the useful economic signals to transmission network users such as generating companies, distribution companies and customers. In a pool based market or bilateral contract market a number of techniques have been proposed to allocate the usage cost and loss cost of the transmission system to generators and/or loads under base case and contingency condition. In this paper, a new approach to allocate the usage cost and loss cost under contingency condition is presented. Maximum flow during an outage is calculated with the help of various line outage impact factors, then with the help of MW-Mile methodology, transmission usage cost and loss cost is allocated to users (generators and/or loads). Two test systems have been considered to check the efficiency and feasibility of the method namely Sample 6 and a large New England 39 bus system.