Practicality of grid quality charge as part of a postage stamp transmission tariff for Belgium

A reliable and economic operation of the transmission grid in a deregulated electricity market can only be obtained by appropriate incentives for the parties involved. Therefore, a cost reflective transmission pricing system is a prerequisite. At the Budapest PowerTech ´99 Conference a transmission tariff system derived from the postage stamp tariff was proposed, taking into account the requirements of the Belgian law and the characteristics of the Belgian grid. The basic postage stamp consists of an individual cost component, a demand component and an energy component. Two characteristic elements that may be added are the way outlyers are charged for reactive power, and the grid quality charge (GQC). Outlyers for reactive power are generators not taking part in reactive power regulation or consumers exceeding the power factor limitations. The grid quality charge is a node and time dependent surplus or reduction of the basic postage stamp rate, based on whether or not extra generation or demand in a node reduces losses, alleviates congestion, and increases reliability and stability. In the paper, the practicality of calculating the GQC based on the superposition principle is checked on a 15-node test network. The superposition principle is extended to include congestion. The need for charging outlyers is also discussed