Economic evaluation of transmission expansion for investment incentives in a competitive electricity market

Robert Fischer, Sung Kwan Joo

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

With the shift of the electric power industry from a regulated monopoly structure to a competitive market environment, the focus of the transmission expansion planning has been moving from reliability-driven transmission expansion to market-based transmission expansion. In market-based transmission expansion, however, a growing demand for electricity, an increasing number of transmission bottlenecks, and the falling levels of transmission investment have created the need for an incentive to motivate investors. The expectation of profit serves as a motivational factor for market participants to invest in transmission expansion in a competitive market. To promote investment in transmission expansion, there is an increasing need for a systematic method to examine transmission expansion for investment incentives from multiple perspectives. In this paper, the transmission expansion problem in a competitive market environment is formulated from ISO and investors' perspectives. The proposed method uses parametric analysis to analyze benefits for investors to identify the most profitable location and amount for transmission addition. Numerical results are presented to demonstrate the effectiveness of the proposed method.

Original languageEnglish
Pages (from-to)627-638
Number of pages12
JournalInternational Journal of Control, Automation and Systems
Volume6
Issue number5
Publication statusPublished - 2008 Oct

Keywords

  • Electricity markets
  • Parametric analysis
  • Transmission expansion

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Computer Science Applications

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