Market-based Transmission Investments and Competitive Electricity Markets
نویسندگان
چکیده
1 Market-based transmission investments can play a role in competitive electricity markets. A short-term electricity market coordinated by a system operator provides a foundation for a competitive electricity market. In this setting, locational price differences define the opportunity cost of transmission. The potential to arbitrage these same price differences provides a market incentive for transmission investment, if there is a method to capture the benefits of investment. For an integrated grid, transmission congestion contracts are equivalent to perfectly tradeable physical transmission rights. With such contracts to allocate transmission benefits, it would be possible to rely more on market forces, partly if not completely, to drive transmission expansion.
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