Economic benefit evaluation in economic transmission planning

Quantifying the economic benefit of a transmission upgrade is a critical step in economic transmission planning. Because of the complexity of the energy market, and the difficulties of estimating the FTR revenue and marginal loss credit in the planning horizon year, it is not easy to find an economic index which can accurately capture the economic benefit for all kinds of entities. This paper shows that the adjusted production cost can capture the full economic index for three typical entity structures (from the simplest entity (with no interchange with other entities), to the more realistic entities with regulated or de-regulated load) when the money flow of the entity is considered.