The suitability of current transmission pricing systems for increased renewable energy production

As renewable electricity generation increases around the world, transmission networks are forced to adapt. The growing need for balancing services and long transmission distances lead to increased costs, which somehow need to be recovered. This paper considers the transmission pricing methodologies in four countries and assesses them against optimal pricing methodologies as defined in academic literature. The countries Australia, Spain, Great Britain and Sweden, with their different renewable energy potential and energy policies, provide a suitable snapshot of transmission pricing today. While they boast different levels of maturity, none of the methodologies fulfill all identified conditions for effective transmission prices with increased amounts of renewable electricity.