This paper summarizes the insights we acquired from our visit of Svenska kraftnät, Sweden's power transmission operator (TSO), in March 2017.
In Sweden, locational tariffs are applied. Locational tariffs provide price signals that reflect the impact of additional output and input on total grid costs to incentivize customers to act "socioeconomically efficient." Infrastructure costs, which correspond to the long-term marginal costs, account for 70% of the total additional transmission costs and are charged on a capacity basis. On the other hand, losses which correspond to the short-term marginal costs account for 30% of the total additional transmission costs and are charged for that amount. The coefficient of locational tariffs may be negative.
Branch line costs are charged at a basic fee, and are not dependent on location. The residual cost of trunk lines, which cannot be covered by locational tariffs that reflect the long-term marginal costs, is also collected at a basic fee, and is not dependent on location.