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A review on some aspects of transmission pricing in power system network

The onset of restructuring in the power system sector has led to the disintegration of the vertically integrated utility into three different individual entities, generating companies, transmission companies and distribution companies. In order to maintain the market efficiency, the allocation of the transmission cost is very vital. The framework of transmission pricing must be transparent and economical in order to maintain the reliable and efficient operation of the electricity market. A review on the latest era of the transmission pricing has been reported here. The importance of the transmission pricing and the allocation of the transmission cost using nodal pricing method and power flow tracing has also been discussed. This article also reviews the influence of transmission pricing on congestion management, the application of optimization techniques in the transmission cost allocation and the allocation of transmission losses along with a brief overview of the scenario of transmission pricing framework in different countries.