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Transmission charges aim to recover the cost of transmission network investments and provide efficient locational signals to new generators. In this paper, we investigate the effect of these charges on the development of new generation capacities in the system. Generation expansion planning is decided by strategic generation planners (SGPs) trying to maximize their profits, while transmission line investments are planned by a central planner and regulatory body aimed at minimizing the overall operation and network investment costs of the system. Regulatory transmission charges (RTCs) are calculated according to the marginal responsibility of generation investment on transmission network investment costs. An iterative algorithm is proposed to model the interaction taking place between the central planner and SGPs. The developed methodology is applied to a 2-node illustrative example and the IEEE-RTS96, and effects of RTCs on investment decisions of SGPs are analyzed. [ABSTRACT FROM AUTHOR]

An unprecedented process of reforms has shaken the power industry during the last two decades. In order to sell the energy produced by their plants, many generation companies are now forced to prepare and submit daily offers to an electricity market under uncertainty about the offers submitted by their rivals. In this paper, we describe a methodology to prepare optimal offers for a generation company operating in a day-ahead market organized as a series of 24 hourly uniform-price multiunit double auctions. We explicitly consider the ability of the company to affect the price of electricity as well as the company's uncertainty about rival's behavior. [ABSTRACT FROM AUTHOR]