Social welfare and Live Line Maintenance

Abstract

Live Line Maintenance has been developed due to its technical benefits: by the application of this maintenance method the number and duration of interruptions in the transmission system are also decreased. After the liberalization and integration of electricity markets, beside the technical advantages the economic benefits have become more determinant driver of this technology since the capacity of cross-border transmission lines are limited. Several studies have revealed economic benefits of electricity market coupling, which increases social welfare, but shipping of electric energy between coupled markets is still limited by the cross-border capacity. Long time ago cross-border lines have been constructed for emergency considerations with negligible market aspects. Cut-off cross-border lines for maintenance decreases the transfer capacity causing further distortion on each market, therefore a simple maintenance on these lines can decrease social welfare. In this paper, the authors introduce the effect of electricity market coupling on social welfare emphasizing the role of transfer capacity, which acts on market prices of interconnected countries. Social welfare gain resulting from live line maintenance of Hungarian cross-border interconnection lines has been investigated.