A Method to Assess Benefits of Transmission Expansions in the Italian Electricity Market

In response to the new needs of the transmission planning process for the competitive electricity markets, a novel method for assessing simultaneously some technical and economic benefits of transmission expansions is here presented. The rationale of the method stems from the acknowledgement that, under a social perspective, the benefits of major transmission expansions include: a) improved reliability, b) increased availability of efficient supply often referred to as "substitution effect" and c) expected increased competition among suppliers often referred to as "strategic effect". In addition to the overall social perspective, the method can assess the benefits of transmission expansions for each market zone as well as separately for consumers, producers and transmission system operators. The method is applied to a one-year simulation of the Italian system to prove it on a real case of reinforcement of the transmission grid.