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Project information

Cost components of cross border exchanges of electricity

I.J. Pérez-Arriaga L. Olmos M. Rivier F. Rubio-Odériz C. Vázquez

January 2002 - July 2002

Funding entity Comisión Europea

This project must be understood within the context of the global effort that is taking place, within the EU and at different fronts, with the purpose of achieving a workable and efficient Internal Market for Electricity. The Florence Forum is bringing all stakeholders together to address the different topics that need to be solved to achieve this objective. In particular, the topic addressed in this project —the design of sound methods of network cost allocation— is essential for the task of cross-border tarification. The proposed methods must include the following steps: 1) Determination of the compensation that is due to each country on the basis of the use of its network by external agents; 2) Determination of the charges that must be applied to each country because of its responsibility in the extra costs of other countries’ networks; 3) Application of the net balance of compensation and charges of a country to its internal network users.