Training Module on Electricity Market Regulation - FINAL SESSION (8)

Session 8: Pricing

Once the revenue requirements are established they should be converted into tariff systems. This session explains the major economic principles of electricity pricing and the general pricing models using average and marginal costs. Moreover the session explores the major pricing models for the electricity activities including: generation, transmission, distribution and retail activities.

• Pricing principles : economic efficiency - cost recovery
• General pricing models : average cost pricing - marginal cost pricing
• Cost allocation issue
• Pricing for different activities in the electricity industry : generation pricing - transmission pricing - distribution pricing - retail supply pricing