Regional transmission infrastructure enables cross-border electricity trade, supports renewable energy integration, and strengthens power system reliability. However, poorly designed transmission charges can restrict trade and discourage investment.
This position paper presents guidelines for transmission pricing and cost allocation based on the “single system paradigm”: treating regional electricity trade as though it takes place within a single jurisdiction. It proposes four principles: charges should be independent of commercial transactions, costs should be allocated in proportion to benefits, tariffs should be established in advance, and charging structures should avoid distorting operational and investment decisions.
The paper provides practical guidance on identifying transmission assets with regional relevance, allocating their costs among countries, and establishing regulatory arrangements to resolve disagreements. It aims to support regulators in developing equitable, predictable transmission charges that facilitate regional power trade and investment.
