A new transmission charging methodology for Australian National Electricity Market

The Australian National Electricity Market (NEM) continues to move from a predominantly government owned and managed market to a more competitive, commercial one. Hence, transmission pricing plays an important role in NEM transmission network business. Currently, the NEM has been using the Cost Reflective Network Pricing (CRNP) and Modified Cost Reflective Network Pricing (MCNRP) method for transmission service charges. The drawbacks of both methods are (1) the load is burden with high transmission use of system (TUoS) charges as this charges is only paid by load (2) inaccurate transmission pricing method as the contribution of counter flows and local load case are totally being neglected. Hence, in this paper, a novel transmission pricing method which is called Distribution Factors Enhanced Transmission Pricing (DFETP) method is introduced in order to increase the utilization efficiency of the network as well as to promote the green technology in a market environment.