Economic Analysis of Electric Power Transmission Expansion

Abstract

When transmission congestion reaches a high level, short-term congestion management tools become more expensive than capital cost investments such as generation or transmission expansion. In such cases, an economics-based investment plan should be developed for the power system. Although there is no well-accepted procedure to accomplish this, numerous models and approaches have been proposed in the power literature. In this article, we develop a decision framework that can be used to model transmission expansion planning and to make economic comparison of different transmission investment plans feasible. We define and compare three approaches under this framework: 1) A mathematical programming model with an overall economic welfare objective, 2) a market-based approach under a budget constraint, and 3) an uncongested system obtained using a market-based approach. In addition, we present several measures that can be used to compare these transmission investment plans.

Coordinating Large-Scale Wind Integration and Transmission Planning

“…And so the up-and downramp constraints are imposed in (4). In this formulation, we assume each generator is bidding based on their marginal cost curve.…”

“…Benders decomposition is employed to reduce the computation time by dividing the complex planning model into subproblems and solving them iteratively [12], [13]. Benders decomposition has been successively used in system expansion planning previously [3], [10], [14]- [16]. In the approach described in this paper, the generation expansion planning (GEP) and transmission expansion planning (TEP) problems use the same set of slave problems which simulate the ISO/RTO-operated day-ahead energy and ancillary services market.…”

Transmission Augmentation With Mathematical Modeling of Market Power and Strategic Generation Expansion—Part I

“…Typically the organization responsible for the shared transmission network has to meet both reliability and economic-efficiency criteria in its assessment of a transmission system augmentation. 1 An "economic" augmentation of a transmission system is defined as an expansion of the transmission system that is not required for the enhancement of system reliability [8], [9]. Mechanisms to evaluate this kind of transmission augmentation are currently ill-defined and typically lack a closed-form mathematical structure.…”

“…Transmission expansion planning in an integrated monopoly structure has been extensively studied in the engineering literature [1], [2]. It has a well-researched mathematical structure and associated numerical solution [3]- [7].…”

Sequential Coordination of Transmission Expansion Planning With Strategic Generation Investments

“…The US power sector will require $2.1 trillion of new investments between 2014 and 2035 which include 579 GW of new generation capacities and 260000 km of new transmission lines [2]. In a vertically-integrated electricity industry, a single entity is responsible for the operation of and investment in the electricity sector [3]- [7]. However, in liberalized power markets, the generation investment decisions are made by profit-maximizing generation companies (Gencos).…”