Transmission planning and investment in the competitive environment

This paper describes the underlying complexities and nature of the situation for the transmission planning and investment challenges in the competitive environment. In the past, the ownership, operation and planning of the transmission network were in the hands of a single central entity. However, the unbundling of the electricity business has raised new challenges that confront the restructured industry. The previous vertically integrated structure has been replaced by a decentralized decision making paradigm. The large number of new players, the proliferation in the number of transactions on the networks, the markedly different utilization of the transmission than in the way it was planned have all contributed to the severe stress of the transmission network. This has resulted in frequent congestion situations with too many customers attempting to obtain what, in effect, are limited transmission services. Investments in the transmission network have failed to keep pace with the increasing demand. The causes for the sorry state of transmission are discussed and the key challenges in the transmission investment arena in the competitive environment are outlined.