A geographical zoning methodology for nodal transmission use-of-system tariffs

Power systems are generally separated into transmission use-of-tariff (TUoT) zones to simplify the tariff mechanism, particularly for large grids. Each zone is an aggregation of neighboring nodes with similar tariffs that are determined based on long-run marginal cost (LRMC) calculations. This paper proposes a zoning methodology which ensures diversification of zonal tariffs while geographically aggregating the nodal TUoTs by weighted average approach. Investment cost-related pricing (ICRP) and DC-load-flow pricing (DCLFP) methods are utilized in computing the LRMC based nodal tariffs. Performance of the LMRC based pricing methods, sensitivity of the economical parameters on the results, and the proposed zoning approach are investigated for a simple 12-bus generic power system. Given the satisfactory results, TUoT zones of Turkish power network are determined with the proposed zoning algorithm for the tariff period of 2012-2014.