Offshore Wind Power Generation and Transmission Tariff Design Options

The aim of this study is to conduct a comparative evaluation of different transmission tariff design options and to draw conclusions for offshore wind power generation (OFWG) investment. The study uses a transmission expansion planning (TEP) model to evaluate the cost and the resulting cost is allocated to grid users using four cost allocation methods: Postage Stamp (PS), Marginal Participation (MP), Aumann-Shapley (AS) and Long Run Marginal Cost (LRMC). Cost allocations are made for all possible combinations of Generation-Load (G-L) split. Numerical case studies were provided using 4 and 12 node network. Results show that LRMC, MP and AS send economic signals but with different levels of strength where the LRMC is superior. However, this might put the development of offshore wind generation at stake. For OWPG, PS is found to be the most attractive method. Furthermore, the cost allocation results and the ranking of the methods are sensitive to G-L split.