Comparative Analysis Between Hybrid and Stand-alone Methods of Network Cost Allocation

This paper analyses five methods for allocating transmission network cost to the system agents that are based upon the extent of use methodology. A comparative study of the results is carried out with two benchmark methods namely Pseudo Locational Marginal Price (pLMP) and Postage Stamp. The aim here is to determine that method/methods whose results are a trade-off between the results from 1) The method that provides the ideal locational signal (pLMP) and 2) The one that is most commonly used to simplify the settlement process (Postage Stamp). The deviations of the respective methods from the benchmark methods are calculated and necessary conclusions are drawn from the results.