On the choice of the slack bus in mechanisms for transmission network cost allocation that are based on network utilization

Abstract

There is no general consensus on the most suitable method for allocating the cost of a transmission network among its users. Most regulators are using some measure of network utilization as the basic criterion for transmission tariff design. Marginal participations (areas of influence) and average participations (tracing flows) are among the most promising and employed alternatives when location signals are required. This paper offers some theoretical and practical results that help in clarifying the properties of these two approaches and their relationship. Some limitations of these two methods, when applied in the context of a regional or multinational market, may be overcome by a specific combination of them that is pro-posed in this paper. Application to a large multinational network model is shown.