Transmission and Wheeling Service Pricing: Trends in Deregulated Electricity Market

Electricity transmission and wheeling service pricing are becoming a more complex and more important task with the ongoing deregulation of electric power industry. In a competitive electricity market, transmission services have to be classified into two categories - transmission service and wheeling service. As distributed generation (DG) becomes more widely deployed in transmission system as well as in distribution networks to fulfill the demand in support of traditional generation, makes the transmission and wheeling pricing complicated. In this context authors have reviewed number of transmission / wheeling pricing methodologies with/without considering DG. In conjunction with traditional methods of pricing new methods were also reviewed which takes into account the pricing of both active and reactive powers because in few DG technologies reactive power flow direction becomes more important. Authors also reviewed the literature furnishing comparison of pricing methods related to DG. Specifically comparisons of MW-mile method based methodologies have been explored. In addition authors have discussed the Indian pricing methodology and inevitability of perfection.