Challenges facing the European power transmission tariffs: The case of inter-TSO compensation

Separation of power systems into a unique set of zones based on transmission usage of network tariffs and transmission loss tariffs

“…Although there are various applications for power exporters and importers which utilize interconnection lines [16], the simplest method is applying generator and load tariffs at border substations to the exporters and importers, respectively. This is the case in Turkish power system.…”

“…If the answer is no, then the algorithm generates an infeasibility cut which indicates this group of buses cannot be considered as a zone. The infeasibility cut is generated by (15) and (16). F l is the tariff group membership matrix (NoZ ⁄ (N ⁄ NoZ)) for those zoning groups of TUNT and TLT which have mismatches.…”

The implication of the European inter-TSO compensation mechanism for cross-border electricity transmission investments

“…In terms of accuracy, the mechanism can lead to cases with no solution and unfair compensations or payments [6]; it can lead to transit flows that do not correspond to the actual transits which also are sensitive to the location of the political or TSO borders [11]. Moreover, based on the historical patterns of the ITC results, it can be concluded that there is no logical link between the actual transits and the ITC charges [25]. In terms of scope, the mechanism is limited only to transit flows and specific network costs [21]; and it does not recognize the benefit transit flows may have for a transit country [23].…”