Economics & Development

Regional transmission infrastructure that interconnects multiple jurisdictions is a cornerstone of cross-border power trade and a key enabler of power system decarbonization. By supporting the integration of diverse low-carbon energy sources, regional grids allow countries with abundant renewable resources to export clean electricity to demand centers, while also improving system flexibility, resilience, and reliability. Open and non‑discriminatory access to regional transmission networks and electricity markets is essential to unlocking the full benefits of regional power trade. An effective regulatory framework must combine market rules, grid codes, transmission tariffs, and regional mechanisms for enforcement and dispute resolution. Traditional approaches to allocating the costs of cross-border transmission infrastructure—such as territorial cost splitting or selective allocation to market participants—have often distorted trade incentives and discouraged investment. These guidelines promote an alternative approach based on the single system paradigm, under which regional power trade is regulated as if it occurred within one jurisdiction. The proposed framework seeks to balance cost recovery, economic efficiency, fairness, and predictability in transmitting pricing and cost allocation, while supporting efficient regional market integration.