Abstract
In deregulated markets, generation companies
freely decide about their investments, while the
transmission planner decides only about network
enhancements. The coordination between Generation
Expansion Planning (GEP) and Transmission Expansion
Planning (TEP) that existed in the traditional monopoly
structure, no longer exists in the restructured power systems.
Generation and transmission are mutually dependent
activities, thus generation and transmission investment
decisions must be coordinated to ensure an optimal
development of the power system. Indeed, a lack of
coordination can lead to inefficient transmission
investments and lower profits for generation companies.
Existing transmission planning approaches do not fully
address this coordination issue. Hence, the paper focuses its
attention on the development of the transmission system and on its
coordination with the installation of new generation plants: a new
transmission planning approach is proposed based on Financial
Transmission Rights (FTRs) contracts to be signed between the
network planner and generation developers in order to financially
commit both parties simultaneously to carry out their projects as
planned. The paper also presents a methodology to evaluate
the efficiency of the proposed approach compared to
existing planning approaches, from both the perspective of
the network planner and the generation developers.
Efficiency of proactive planning based on financial transmission rights contracts
