NETA Approach of Power Transmission Pricing and Its Tryout in Northeastern Power Grid of China

Abstract

The New Electricity Trading Arrangement (NETA) has been successfully applied to England and Wales since 2001. In this paper, the NETA transmission pricing approach is introduced in detail. According to NETA, the transmission charges consist of the connection charges, the Transmission Network Use of System (TNUoS) charges and the Balancing Services Use of System (BSUoS) charges. The calculation method of the TNUoS charges has some special characteristics, some of which are analyzed and proved theoretically. In China, there is no independent transmission price until now. It has restrained the further development of electricity industry reform. To test the efficiency and performance of NETA approach, we build the mathematical models for transmission charges of Northeastern Power Market by the NETA approach and some other traditional approaches. The computational comparison of these approaches and some helpful conclusions are reported. The results show us that some key parameters of NETA approach can be set conveniently. They can offer us some instructive economic signals for power markets.

Comparative Analysis of Several Transmission Pricing Methods

“…So the transmission problem has aroused attention, mainly focusing on how to establish a fair and reasonable transmission price. So far, a variety of transmission pricing methods[2~7]have been proposed and divided into two categories: embedded cost methods based on accounting [8,9], includingstamp method，contract pathmethod ， MW-Mile method [10] ， sensitivity method [11] ， flow tracing method [12,13] ， Z-Bus method [14]， game theory method [15] and so on, and marginal cost methods based oneconomics. Although some methods have been applied in practice,none of these has been widely accepted.…”