Transmission Investment Incentives: Economic Analysis by Example Summary

This paper summarizes the use of agent-based simulation as a tool for studying transmission investment incentives, and it is meant to illuminate the source and reasoning for the difficulties in aligning incentives for enhancing the transmission system. We suggest the use of a new method of calculation for bid optimization be applied to the economic analysis of long-term incentives for transmission investment. This technology can be broadly applied to help negotiators in transmission planning quantify their counterparties benefits and costs, as well as their own. By investigating different schemes for transmission ownership, planners can better optimize outcomes.