Evaluation of the marginal based remuneration-a case study using the Portuguese transmission network

In the scope of the revision of the Portuguese Tariff Regulation, the Power Systems Unit of INESC Porto concluded a consultancy study aiming at estimating the remuneration that could be obtained by the Portuguese transmission provider using short term marginal prices. This paper describes the main principles behind the regulation of the transmission sector in force in Portugal, details the model used to compute the nodal marginal prices in the transmission network, presents a comprehensive set of results for some scenarios in which the year was organized as well as the estimate of the referred remuneration. The data of the scenarios that were used is publicly available and we adopted typical values for generation costs of different thermal plants. At the end, the paper includes some ideas of future work aiming at improving the quality of the estimate of the marginal based remuneration.