Economic evaluation of transmission outages and switching for market and system operations

Traditionally, transmission outages and transmission switching are not part of market economics optimization. Most of transmission outage and switching analysis is solely based on system reliability criteria without much consideration of market efficiency or any systematic economic evaluation. As the global movement of smart grid progresses with stronger, more flexible and more efficient transmission systems, RTOs have started using economic analysis tool to evaluate economic impacts of outage in order to improve overall market efficiency. On the other hand, optimal transmission switching seems to be a viable way to leverage grid controllability and enhance system performance. In this paper, we discuss the process of outage coordination and a measure of economic evaluation, review the basic concept of optimal transmission switching and discuss some of its market design and implementation challenges.