Cost-benefit analysis of reliability management by transmission expansion planning in the competitive electric power market

Recently, a competitive electricity market has been introduced in many countries to improve the economic efficiency of power system operation. From the viewpoint of economic efficiency in the market, the establishment of a new rule for power system operation is indispensable for realizing open-access to the existing transmission network by nonutility generators. The overall objective of this study is to analyze planning for long-term transmission expansion for network reliability in the competitive market, and to assess transmission tariffs with regard to long-term and short-term economic efficiency. In this paper, a transmission expansion strategy for assuring network reliability is proposed in a hypothetical perfect competitive electricity market. The influence on social welfare of planned expansion of the transmission system and of congestion management operation of the network for the purpose of securing reliability is examined. The economic benefit of newly participating generators was shown when effective reliability maintenance measures were implemented.