Before the deregulation of the electric industry, a vertically integrated utility made planning decisions for both the generation system and the transmission system according to reliability criteria. The deregulation of the electric industry has resulted in an unbundling of the long-term planning function for generation and transmission systems. In the deregulated world, transmission planning is different from that in the regulated environment. In this study, we present a market-based transmission expansion planning model and compare it with a traditional reliability-based transmission planning model. Reliability-based transmission planning tries to install new lines at minimal cost while fulfilling system reliability criteria. Market-based transmission planning, on the other hand, seeks investment opportunities so that network expansions can generate more economic benefits than the costs. Benders decomposition technique is employed in both methods, and their master problems and slave problems are compared, respectively. The scalability of the market-based transmission planning algorithm is also discussed.

Various uncertainties occur in the planning process. Uncertainties appearing in the planning process are analyzed systematically and classified into random and non-random uncertainties. Monte Carlo simulation method is applied to simulate random uncertainties, while robustness testing method is employed to incorporate non-random uncertainties.

Most planning optimization tools optimize generation expansion plans under an assumed transmission expansion plan, or they optimize transmission expansion plans under an assumed generation expansion plan. In practice, engineers typically find optimal transmission expansion plans for various generation expansion futures, often iterating between generation planning and transmission planning results, settling on those transmission expansion plans which are needed under most or all of the generation expansion futures. Inadequately accounting for the interdependency between the two planning processes may result in suboptimal investment decisions and lost economic benefits. In this article, the interactions between large-scale wind integration and transmission system planning are analyzed, and a new computational procedure of system expansion planning that coordinates generation and transmission investment is proposed.