Splitting transmission costs in proportion to estimated net benefits, as in the PNBD, will result in an allocation that is slightly closer the SV (Figure 5 (b)).
Under this mechanism, the cost of new transmission interconnections and congestion rents could be initially divided through a conventional mechanism, such as the ESP or the PNBD. A coordinating organization (e.g., ENTSO-E or ACER) could then estimate the required side payments to achieve a fair allocation of net benefits under the SV.
(9.) Here we consider the first variant of the PNBD described in Jansen et al.