Use of system costing for energy exchange

In setting up energy and capacity exchange contracts, the cost of using the system to effect the exchange must be estimated. This cost will depend upon at least two factors, namely: cost of losses and system operating cost (per MWh); and system infrastructure cost to pay for plant and any necessary reinforcement (per MW). The problem then is to allocate a charge for use-of-system which is seen to be fairly divided between fixed and variable costs. This is not unlike charging for a power supply to any customer