Patterns of Transmission Investment

Paul Joskow

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper examines a number of issues associated with alternative analytical approaches for evaluating investments in electricity transmission infrastructure, and institutional arrangements to govern network operation, maintenance and investment. The relationships between transmission investments driven by opportunities to reduce congestion and loss costs and transmission investment driven by traditional engineering reliability criteria are discussed. Reliability rules play a much more important role in transmission investment decisions today than do economic investment criteria as depicted in standard economic models of transmission networks. These models fail to capture key aspects of transmission operating and investment behaviour that are heavily influenced by uncertainty, contingency criteria and associated engineering reliability rules. I illustrate how the wholesale market and transmission investment frameworks have addressed these issues in England and Wales (E&W) since 1990 and in the PJM Regional Transmission Organization (RTO) in the U.S. since 2000.

Keywords: L51; L14; L43; L94 (search for similar items in EconPapers)
Pages: 52
Date: 2005-05
Note: CMI, IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Related works:
Chapter: Patterns of Transmission Investments (2006)
Working Paper: Patterns of Transmission Investment (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0527

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