Research on pricing strategy of electricity transmission-distribution based on system dynamics

Abstract

The electricity transmission-distribution is an important link of power system. Pricing transmission-distribution is the key part in the new round electricity market reform in China. The paper investigates the components of cost during transmission and distribution considering the different levels of voltage under government regulation, which forms original pricing model according to the reasonable profit pricing mode. Based on the above model, we apply System Dynamics to simulate the trend of the transmission-distribution price and capacity under the different scenarios classified by return on investment. The result of the simulation shows that the increasing ROI can raise the grid capacity investment, but it can’t motivate power grid companies to reduce costs and improve management efficiency.