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We construct a general analytic framework for the transmission network investment problem in the market environment and demonstrate its application to some test systems. We define a set of metrics to quantify the improvement attained in terms of welfare for all the participants and make use of them in the evaluation of the impacts of new transmission investments under competition. The proposed metrics are useful to the central entity responsible for transmission planning to provide meaningful measures of the effects of a modification in the grid over the planning horizon. The proposed framework is particularly useful to transmission network planners to support desired environmental targets. The analysis of the effects of new investments on the participants affected by the expansion includes the assessment of appropriate environmental attributes. The consistency of the measured values in terms of these metrics allows the comparison of disparate transmission investment projects and their effective prioritization. A key element of the framework is the deployment of an optimization scheme to maximize the social welfare with and without the transmission asset investments under various bidding behaviors of the market players and contracting conditions. We report the application of the proposed framework to investigate several transmission expansion scenarios on the IEEE 24-bus reliability test system network. The results on both pool-based markets and combined pool-bilateral contract markets provide a good illustration of the capability of the framework to effectively address realistic questions in transmission investment. CE Database subject headings: Investments; Planning; Assets; Grid systems; Electric power supply; Public welfare.

This paper analyzes the effects of relieving power transmission congestion to encourage the development of renewable energy (RE) under different regulatory policies. The present model is based on Cournot competition and incorporates uncertainty and the variability of both renewable resources and demand. Transmission congestion particularly affects the development of RE under subsidy policies (feed-in tariff and premium payment). By investing in flexible AC transmission system (FACTS) and/or other devices that increase transmission capacity, all policies have positive incentives from the social perspective. From a private perspective, the tax policy does not provide sufficient incentives. Higher levels of transmission investment are obtained from a social perspective than from a private perspective. Finally, the existence of multiple equilibria affects the resulting social welfare and market outcomes. In particular, CO2 emissions and social welfare may significantly vary from equilibrium to equilibrium. [ABSTRACT FROM AUTHOR]

Thermal generators' emissions constitute an externality on which a regulator might wish to impose constraints. In addition, transmission capacity for sending energy may be naturally restricted by the grid facilities. Both pollution standards and transmission capacity impose constraints, coupling the strategies of the agents in their joint strategy space. To force competitive electricity generators to respect those constraints when individual monitoring is unavailable we envisage the regulator solving a generalized Nash equilibrium problem to establish an equilibrium in which the joint constraints are satisfied. If the regulator appropriately modifies the generators' payoffs then they will play a decoupled game in which they can ignore the information on the joint constraints. For the payoff modification to induce the required behavior, a coupled constraints equilibrium needs to exist and be unique. We borrow from the electrical engineering (EE) literature a three-node network model that has these properties and use it in this paper to discuss and explain the behavior of the agents subjected to the coupled constraints. We find that the imposition of transmission and environmental restrictions may increase the output share of an inefficient generator and decrease consumer surplus. [ABSTRACT FROM AUTHOR]