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A Quantitative Analysis of the Relationship Between Congestion and Reliability in Electric Power Networks

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  • Seth Blumsack
  • Lester B. Lave
  • Marija Ilic

Abstract

Restructuring efforts in the U.S. electric power sector have tried to encourage transmission investment by independent (non-utility) transmission companies, and have promoted various levels of market-based transmission investment. Underlying this shift to “merchant†transmission investment is an assumption that new transmission infrastructure can be classified as providing a congestion-relief benefit or a reliability benefit. In this paper, we demonstrate that this assumption is largely incorrect for meshed interconnections such as electric power networks. We focus on a particular network topology known as the Wheatstone network to show how congestion and reliability can represent tradeoffs. Lines that cause congestion may be justified on reliability grounds. We decompose the congestion and reliability effects of a given network alteration, and demonstrate their dependence through simulations on a 118-bus test network. The true relationship between congestion and reliability depends critically on identifying the relevant range of demand for evaluating any network externalities.

Suggested Citation

  • Seth Blumsack & Lester B. Lave & Marija Ilic, 2007. "A Quantitative Analysis of the Relationship Between Congestion and Reliability in Electric Power Networks," The Energy Journal, , vol. 28(4), pages 73-100, October.
    • Handle: RePEc:sae:enejou:v:28:y:2007:i:4:p:73-100
    DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No4-4
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    References listed on IDEAS

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    1. Bushnell, James B & Stoft, Steven E, 1996. "Electric Grid Investment under a Contract Network Regime," Journal of Regulatory Economics, Springer, vol. 10(1), pages 61-79, July.
    2. Shmuel S. Oren, 1997. "Economic Inefficiency of Passive Transmission Rights in Congested Electricity Systems with Competitive Generation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 63-83.
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    Citations

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    Cited by:

    1. Benjamin, Richard, 2013. "A two-part tariff for financing transmission expansion," Utilities Policy, Elsevier, vol. 27(C), pages 98-107.
    2. Juan Rosellón & Hannes Weigt, 2011. "A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks: Theory, Modeling, and Application," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 119-148.
    3. Lamadrid, Alberto J. & Maneevitjit, Surin & Mount, Timothy D., 2016. "The economic value of transmission lines and the implications for planning models," Energy Economics, Elsevier, vol. 57(C), pages 1-15.
    4. Ingo Vogelsang, 2018. "Can Simple Regulatory Mechanisms Realistically be used for Electricity Transmission Investment? The Case of H-R-G-V," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    5. Blumsack, Seth & Xu, Jianhua, 2011. "Spatial variation of emissions impacts due to renewable energy siting decisions in the Western U.S. under high-renewable penetration scenarios," Energy Policy, Elsevier, vol. 39(11), pages 6962-6971.
    6. Luis M. Abadie & José M. Chamorro, 2011. "Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case," Energies, MDPI, vol. 4(10), pages 1-32, October.
    7. Chamorro, José M. & Abadie, Luis M. & de Neufville, Richard & Ilić, Marija, 2012. "Market-based valuation of transmission network expansion. A heuristic application in GB," Energy, Elsevier, vol. 44(1), pages 302-320.
    8. William Hogan & Juan Rosellón & Ingo Vogelsang, 2010. "Toward a combined merchant-regulatory mechanism for electricity transmission expansion," Journal of Regulatory Economics, Springer, vol. 38(2), pages 113-143, October.
    9. Ashraf, Muhammad Hasan & Chen, Yuwen & Yalcin, Mehmet G., 2022. "Minding Braess Paradox amid third-party logistics hub capacity expansion triggered by demand surge," International Journal of Production Economics, Elsevier, vol. 248(C).
    10. Emma S. Johnson & Santanu Subhas Dey, 2022. "A Scalable Lower Bound for the Worst-Case Relay Attack Problem on the Transmission Grid," INFORMS Journal on Computing, INFORMS, vol. 34(4), pages 2296-2312, July.
    11. de Nooij, Michiel & Baarsma, Barbara & Bloemhof, Gabriël & Slootweg, Han & Dijk, Harold, 2010. "Development and application of a cost-benefit framework for energy reliability: Using probabilistic methods in network planning and regulation to enhance social welfare: The N-1 rule," Energy Economics, Elsevier, vol. 32(6), pages 1277-1282, November.
    12. Alisha Fernandez & Seth Blumsack & Patrick Reed, 2012. "Evaluating wind-following and ecosystem services for hydroelectric dams in PJM," Journal of Regulatory Economics, Springer, vol. 41(1), pages 139-154, February.
    13. Hitaj, Claudia, 2015. "Location matters: The impact of renewable power on transmission congestion and emissions," Energy Policy, Elsevier, vol. 86(C), pages 1-16.
    14. Kory Hedman & Shmuel Oren & Richard O’Neill, 2011. "Optimal transmission switching: economic efficiency and market implications," Journal of Regulatory Economics, Springer, vol. 40(2), pages 111-140, October.

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    More about this item

    Keywords

    Electricity networks; congestions; reliability; electricity transmission; US;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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