A global perspective on the impact of competition on transmission

Competitive electric systems have been introduced in Chile (1985), England and Wales (1990), Scotland (after a fashion, 1990), Argentina (1992), the State of Victoria Australia (1995), and Finland (1995). Competition is in the process of being introduced into Sweden (1996), the USA at wholesale level, for new generation in Spain, and in New Zealand in due course. The creation of a competitive market fundamentally changes the role of transmission. Introducing competition means that there will be a number of generating units in diverse ownership, distribution undertakings, and directly connected customers who are independent agents operating in a market. The fragmentation creates a set of complex interfaces between the planning and operation of generation and the planning and operation of transmission which have to be knitted together with a mixture of contracts and pricing signals. The diverse interests create a governance problem. The author discusses some of the common themes emerging from the change to a competitive market in the countries mentioned. The author discusses the independence of transmission, separation of transmission and system operation, ancillary services, market economics, and the governance problems.