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Improving inter-transmission compensation in EU

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  • Stoilov, Dimo
  • Stoilov, Luben

Abstract

This article is intended as a roadmap to the correction of the existing shortcomings in the EU power transmission tariff system, especially in the existing mechanism of Inter-Transmission System Operator (TSO) Compensation (ITC). The relevant literature is surveyed and the essence of the issue is formulated. Definitions, preconditions, assumptions and constraints for the problem are explained. The paper outlines the most simple and straightforward approach for the improvement of inter-transmission compensation in the Continental European Synchronous Area. The proposals are based on the old practice of socialization of the network costs retained in almost all European countries, i.e. the principle of charging the customers “at the exit”. Equal treatment is given to internal users and cross-border users: a TSO is reimbursed for both internal and cross-border flows from the users conjoined to its network on an equal footing with the users extracting power from the peripheral nodes. The existing inequity in individual payments for power transmission is overcome and the cross-border subsidy element is avoided. This approach should be tested (modeled and evaluated) with real data for the European union of networks. Some key parts of the article are written in a more popular style, in order to be accessible to inexpert readers as well.

Suggested Citation

  • Stoilov, Dimo & Stoilov, Luben, 2013. "Improving inter-transmission compensation in EU," Energy Policy, Elsevier, vol. 62(C), pages 282-291.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:282-291
    DOI: 10.1016/j.enpol.2013.07.031
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    References listed on IDEAS

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    1. Hogan, William W, 1992. "Contract Networks for Electric Power Transmission," Journal of Regulatory Economics, Springer, vol. 4(3), pages 211-242, September.
    2. Olmos Camacho, Luis & Perez-Arriaga, Ignacio J., 2007. "Comparison of several inter-TSO compensation methods in the context of the internal electricity market of the European Union," Energy Policy, Elsevier, vol. 35(4), pages 2379-2389, April.
    3. Stoilov, Dimo & Dimitrov, Yulian & François, Bruno, 2011. "Challenges facing the European power transmission tariffs: The case of inter-TSO compensation," Energy Policy, Elsevier, vol. 39(9), pages 5203-5210, September.
    4. bhakar, Rohit & sriram, V.s. & padhy, Narayana prasad & gupta, Hari om, 2010. "Probabilistic game approaches for network cost allocation," MPRA Paper 29003, University Library of Munich, Germany.
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    Cited by:

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