Electricity transmission pricing: An international comparison

Abstract

This paper discusses six criteria for electricity transmission prices, concerned with economic efficiency and political implementation. Prices should signal the costs of using the transmission system, but this may conflict with the need to produce a clear message that users can understand, given the complexity of transmission costs. Changes to transmission prices are also likely to produce winners and losers, and so political constraints may impede cost-reflective changes. This paper draws out some of these themes, using examples from eight studies of transmission pricing systems, written by members of a working group of the Energy Modeling Forum. © 1997 Elsevier Science Ltd. All rights reserved.