Multiple Perspectives in Power Transmission Expansion Planning under Environmental Awareness

Abstract

Over the past 20 years, most countries have made revolutionary changes in critical infrastructure. One of them is the massive deregulation of infrastructure industries such as the airline, natural gas, trucking, telecommunications, and most recently, the electric power sectors. Traditionally, these infrastructure industries were publicly owned and/or run by vertically integrated, regulated monopolies. Deregulation of these infrastructure industries has brought about decentralization of decision making and has created markets that enable and incentivize customer choices. By empowering consumers to make informed choices, the deregulation movement has fundamentally changed the concepts of pricing and reliability. For example, in an infrastructure industry that is governed by an “obligation to serve,” service curtailment e.g., being bumped off a flight due to overbooking is considered a failure in terms of reliability. By contrast, a deregulated environment is governed by “obligation to serve at a price,” in which service curtailment is no longer counted as a failure but a voluntary action of the customer in exchange for compensation or a cheaper fare . In the electric power industry, the vertical separation of the generation, transmission, and distribution sectors has resulted in new operations and planning paradigms. Planning and investment in the privately owned generation sector is now driven by economic considerations in response to market prices and incentives. The transmission system, on the other hand, is operated by independent transmission organizations that may or may not own the transmission assets. Whether the transmission system is owned by the system operator or by separate owners, the transmission system operator plays a key role in assessing the needs for transmission investments from reliability and economic perspectives, and in evaluating proposed transmission investments. Restructuring has resulted in increased use of transmission infrastructure to support electricity trade. It is sometimes argued that this growing stress has reduced reliability as systems are operated closer to maximum capacity. Meanwhile, investment in the transmission infrastructure has lagged behind power demand growth, which has been mounting around the world. There is a clear need for better methodologies to manage, plan, and incentivize investment in transmission to allow the existing infrastructure to operate more efficiently and securely. In addition to that, the transmission network should be able to accommodate a greater volume of trades and provide transparent transmission prices to support other markets. Furthermore, with aging power plants and old technologies still being used to cope with the rising