The economic analysis of transmission investment policies

Abstract

This paper defines and discusses three types of benefits for economic analysis of transmission investment policies. These benefits are termed (1) The Efficiency Benefit, (2) The Static Competition Benefit, and (3) The Dynamic Competition Benefit. To provide more insights to these benefits, an example system is studied. The results show that a transmission network service provider can and should use the transmission investment policies to improve the competition (static and dynamic) in the supply electricity industry. Further research is necessary to model the static and dynamic competition benefit in the process of transmission expansion planning.