A practical method for determining transmission usage-based tariff in electricity markets with different trading modes

In this paper, a practical approach is presented for determining transmission usage-based tariff, based on the well-known generation shift distribution factor (GSDF) based method and the recently developed power flow tracing method. First, the GSDF based method is employed for allocating the transmission usage-based charges among various transactions, and then the power flow tracing technique used for further distributing the charge such obtained among the participants of each transaction concerned. The proposed method is easy to implement and is applicable to electricity markets with various trading modes such as bilateral, multilateral and pool trading modes, and to interconnected multiple-regional and hierarchical electricity markets as well.