Analysis and reconciliation of conflicting interests in transmission planning

The debate is still on regarding the rationale for transmission expansion in deregulated power markets. Transmission planning with the social welfare as the objective would lead to a different optimal expansion plan compared to the planning deemed optimal by individual merchants acting on market forces with profits as their objective. This issue has remained unresolved amid varying rationales and conflicting interests. A fundamental analysis of the planning outcomes under different market models is presented along with the possibilities of reconciling these models and approaches. Albeit at a simplified level, the planning paradigms and their outcomes have been quantified analytically. Very distinct and significant relationships have been quantified which can be very helpful in formulating sound frameworks for network planning. Simple but clear examples are presented to illustrate the theoretical formulations.