Novel dynamic framework to form transmission tariffs with suitable economic signals

•A novel dynamic framework to form the transmission network use of system (TNUoS) tariff in accordance with the energy transition is presented.•The framework can employ any transmission cost allocation (TCA) method.•The economic efficiency of the TNUoS tariff is increased.•Customers are incentivized to grow their consumption in a more distributed way.•Generation gets close to consumption, distant flows are decreased, and then the total transmission loss is reduced. The energy transition intensifies the limitations verified on transmission cost allocation (TCA) methods traditionally employed. Two methodological limitations common to them can be identified: (1) lack of coordination between transmission pricing and load evolution and (2) lack of signals to guide the growth in generation capacity. This work presents a novel dynamic framework to form transmission tariffs capturing two important aspects: the load evolution at each bus and the optimal generation necessary to minimize the transmission loss. The framework overcomes the identified limitations and provides suitable tariff adjustments that reflect the responsibility of each user on network investment. A dynamic tariff-load balance is induced and generators who contribute to loss minimization are rewarded. So, effective signals for the generation capacity expansion are obtained. Also, the tariff formation is integrated with the reconfiguration of responsive distribution networks (DNs). Thus, this work proposes a new structure in terms of tariff integration and operational coordination in accordance with modern rate designs and recent energy security concerns.