Marginal cost-based pricing of distribution: A case study

This paper presents results of a software development project carried out by the “Electricity North West” (ENW) and “TNEI” to find economic use-of-system charges for the extra high-voltage (EHV) network. Several cost-based charging models which satisfy principles set by the Regulator, such as cost reflectivity, predictability, stability and transparency were developed. In this paper, the emphasis is put on the developed software and the comparison of nodal marginal charges obtained from the proposed pricing models.