Cost of transmission transactions: Comparison and discussion of used methods

Abstract

Power market deregulation imposed the separation of several activities such as power production, transmission and distribution, with the consequent separation of these activities costs. This article presents and compares methods that allow determining how much and who must pay for the use of the electrical transmission network. This issue is analysed, under the point of view of several transmission system users: generators, loads and transactions being analysed. The advantages and disadvantages of each method, from the point of view of the considered users are discussed. The embedded methods are used as the base of costs calculation, specifically the methods Postage-Stamp and MW-mile and some of its variants. This study is illustrated using a simple nine-bus electrical network that being used by R&D groups for several projects concerning power markets.