The design and implementation of a generation and transmission tariff

With the envisaged Southern African grid becoming a reality and the restructuring of the electricity supply industry in South Africa, transfer pricing has been introduced in Eskom by means of a generation and transmission tariff. The objectives, design philosophy and implementation of these tariffs are described. The generation tariff consists of two parts,-an energy payment and a capacity payment. The transmission tariff also consists of two parts,-a demand charge and an energy charge. The magnitude of the energy components in both tariffs depends on time of use