Value-based transmission expansion planning in deregulated market

Transmission expansion planning (TEP) has faced a significant change since the deregulation of power systems. It becomes even more complicated due to the conflicting objectives and uncertainties which have been exposed by the power industry restructuring. In this paper, a value-based transmission expansion planning algorithm is proposed. The algorithm makes use of the probability density functions (PDFs) of locational marginal prices (LMPs) to deal with the changes in power flow patterns due to the changes in offering prices set by generation companies.