1

Abstract-- In recent years, the issue of flexibility has become

increasingly important to power system planning. Generation
flexibility has been under continuous research for many years;
however there is little research on transmission expansion
planning flexibility, which has attracted more and more attention
due to the increasing uncertainties in a competitive electricity
market environment. Planners have to carefully consider the
resulting costs, benefits and risks during the planning phase.
Future electricity demand is a main source of uncertainty facing
transmission planners. Flexibility is a useful way to deal with it.
The most flexible plan can reduce the probability of loss of
demand, cut down the cost of reconfiguration and save
reconstructing time. In this paper, we classify the transmission
flexibility into three dimensions including market flexibility,
operational flexibility and expansion flexibility with detailed
definitions. Transmission expansion flexibility (TEF) is the main
focus of this paper and can be used as an important criterion for
decision making and transmission planning. Case studies based
on two test systems are used to illustrate the proposed TEF and
its application in power system planning. The case study results
clearly demonstrate the effectiveness of the proposed method in
transmission expansion planning. The use of TEF can also help
transmission system investors to achieve more returns from the
competitive market.

Index Terms -- cost, expansion flexibility, flexibility, market
flexibility, operational flexibility, probability density functions
(pdfs) and reliability.
I. INTRODUCTION
RANSMISSION planning primarily aims at achieving the
optimal transmission plans which meet the required
reliability level as well as satisfying technical constraints
with the least cost. In a competitive electricity market, it is
subject to an increasing amount of uncertainties such as the
demand forecast uncertainty, electricity price volatility,
reliability of the generation groups, economic growth
uncertainties, and changing environmental and social impacts
on the energy sector. In addition to considerations of these
uncertainties, planners also need to balance the technical
requirement of the system and the requirements from investors
who aim at profit maximisation in a market environment. All
these make transmission planning a very complex constrained
multi-objective optimisation problem which leaves little
choice for the transmission planners. Furthermore, the result
of transmission planning is a platform for electric participants
to compete. It must have the ability to deal with creditable

M. Lu (email: lumiao@itee.uq.edu.au), Z. Y. Dong (email:
zdong@itee.uq.edu.au) and T. K. Saha. (email: saha@itee.uq.edu.au) are with
the School of Information Technology and Electrical Engineering, The
University of Queensland, Brisbane, Queensland, Australia).

contingencies and other reasonable events that may happen in
the future. Flexibility is one of the effective means that can
cope with the increasing uncertainties in a competitive market.
In [1], Hobbs, et al. define a flexible plan is one that
enables the utility to quickly and inexpensively change the
systems configuration or operation in response to varying
market and regulatory conditions. Flexibility is a common
concern as the ability to change or react with little penalty in
time, effort, cost or performance, [2].
Most transmission facility is designed for an expected life
ranging from 20 to 40 years or even longer [8]. A lot of things
can happen during such a long period. For instance, an
unexpected economic growth may change the customer
demand pattern and may result in insufficient infrastructure to
meet the unexpected demand growth as happened in US-
Canada Blackout in 2003 [10]. Otherwise, it may introduce
requirements for relocating some transmission facilities to
suits customer needs. However, because the cost of moving
equipment can be often higher than the resale value of
installed assets [3], transmission system investors have to pay
the fiddler of their decisions for a very long period. From this
point of view, a more flexible plan is needed because it is
adaptable to changes in uncertain environment and helps the
investors to save from unexpected insufficiency.
Estimating the flexibility of utility resource plans is
commonly accepted in the generation business, while it has
not been carried out much in transmission systems. For
generation planning, there are several related concepts for
flexibility evaluation. The generation system performances
under different scenarios with uncertainties are compared to a
single scenario with a set of expected future conditions in [4].
Decision trees are used to calculate generation flexibility
benefits in [1]. Five actions which can change the transmission
network configuration were summarised in [5]: 1) circuits can
be added or deleted, 2) a phase angle can be inserted into the
network, 3) circuit impedance can be changed by adding series
reactance into the circuit, 4) network nodes can be changed
and 5) circuit breakers can be opened or closed. Despite such
general statement, there is no quantified flexibility index for
transmission planning yet.
Because of the lack of flexibility evaluation in transmission
planning, it is difficult to compare various plans and it is hard
to say how flexible a system is. Moreover, it leads to
difficulties in defining objectives and improving it in the right
direction. Consequently, quantification of transmission
flexibility is the main objective in this paper.
The paper is organised in the following way. In Section II,
transmission flexibility is classified into three dimensions:
market flexibility, operational flexibility and expansion
Transmission Expansion Planning Flexibility
M. Lu, Z.Y. Dong, Member, IEEE, and T.K. Saha, Senior Member, IEEE
T
2
flexibility. Transmission expansion flexibility (TEF) is
proposed in Section III together with methods of
quantification. These techniques are later employed in case
studies for validation purpose in Section IV before the
conclusions in Section V.
II. CLASSIFICATION OF TRANSMISSION FLEXIBILITY
Flexibility is a multi-dimensional term. In the context of
transmission expansion planning, flexibility is an attribute of
plan for planners and operators. In fact, it is also an important
factor that allowing customers have choices in a competitive
electricity market. In this paper, we define three types of
transmission flexibilities to clarify the condition under which a
transmission system may be regarded as a flexible system.
The classifications of transmission flexibility are:
(1) Market flexibility, which is the ability of the system to
offer customer choices and the degree of the system to
facilitate investors for sequential investment;
(2) Operational flexibility, which is the ease of controlling
the operation of transmission system and the ability for
continuous technique updating; and
(3) Expansion flexibility, which is the ability of the system
that allowing easy reconfigurations with few penalties.
Their relationship is shown in Figure 1.

Market
Flexibility
Operational
Flexibility
Expansion
Flexibility
Transmission
Flexibility


Fig. 1. Transmission Flexibility Structure

Market flexibility and operational flexibility are beyond
the scope of this paper, and only transmission expansion
flexibility is discussed.
III. TRANSMISSION EXPANSION FLEXIBILITY
In a competitive environment, the uncertainties are the
most important factors that lead us to quantify the flexibility.
The new uncertainties may come from the demand side or
from the industry participants. As a media between
generations and demands, transmission planning has been
limited by the generation reliability constraints and customer
requirements as shown in Fig 2. Because the electric utilities
are no longer monopolies, the supply side need to deal the
uncertainties themselves and demand side creates more
uncertainties than ever. An evaluation method based on
customer interrupted load is going to be used to measure the
TEF.

Fig. 2. The Relationship Between Transmission Network Service Provider
and Other Participants
Transmission Expansion Flexibility
Transmission planning is trying to satisfy the requirement
of reliability and economical effect under a deregulated
environment. Most of the possible uncertainties that could
happen during the life time of the planned transmission system
need to be considered in transmission planning. Generally, the
demand forecast can get a series of results that reflect different
uncertainty scenarios. Demand forecasting is the basis for
planning, and the resulting uncertainties should be the primary
consideration in planning. According to Powerlink
Queensland, the demand forecast of Queensland region is
shown in Figure 3, [6].
0
2000
4000
6000
8000
10000
12000
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
M
a
x
i
m
u
m

D
e
m
a
n
d

(
M
W
)
High Growt h Scenario
Low Growt h Scenario
MediumGrowt h Scenario

Fig. 3. QLD Region Peak Demand Forecasting (Ref. [6])

In Figure 3, the peak demand forecast includes three
scenarios associated with different economic growth rates.
Because the medium growth scenario has higher probability to
happen than the others in the future (as shown in Figure4),
planner usually choose the proposed plan under medium
growth scenario as the final demand forecast for planning
purpose. However, we can not completely exclude the
possibility of the other two scenarios. If the future demand
follows the low growth scenario, the medium growth based
plan can still meet the demand but with higher/excess
investment costs. Flexibility analysis will help to find which
plan will be the most reliable and cost efficient in the future
when the high scenario happens.
From the business point of view, it is more desirable if the
expansion plan can be easily adapted to changes from the
market. In other words, investors need to know whether a plan
has a great ability to deal with the worse case or not.
Therefore, we consider the criteria of TEF as:
3
a. Fewer financial penalties. Once an uncertainty event
suddenly happens, the original planned system still can
run with fewer penalties.
b. If the plan allows relatively longer time for
reconfiguration. In case of potential deviation has been
detected, the flexible plan should allow enough time for
planners to modify the original.
c. Leave larger reserve capacity, easy to control.

Fig. 4. Probability Model of Required Demand

From transmission planning point of view, the main
financial penalty is customer monetary losses arising from
electric energy supply curtailment. In Australian National
Electricity Market, value of lost load (VOLL) is used to
represent the value that customers put on an unsupplied MWh.
If the total penalty denoted by ) (
1
x f , then it is a function of the
interrupted load.
For criterion b, if congestion never happens in a system
during the planned horizon, then there is no need to do
reconfiguration. Reconfiguration is needed only when the
planned topology is no longer suitable. The designed system
capacity maybe more than or less than customer required
demand. In case the supply is greater than demand, planner
can simply stop or slow down the construction. On the
contrary, it may result in interruption again. It has potential
relationship between reconfiguration and interrupted load.
Hence, the second criterion ) (
2
x f is also a function of
interrupted load.
The aim of having large reserve capacity is to avoid
congestion and allow future developments. Assuming that
there is no congestion in a system all the time, then the system
is said to have sufficient reserve capacity. From this point of
view, the third criterion ) (
3
x f is a function of interrupted load
as well.
Base on above consideration, all the three criteria ) (
1
x f ,
) (
2
x f and ) (
3
x f are functions of the interrupted load and the
transmission flexibility can be defined as in Eqn. (1).

=
load high
load medium
dl l g TEF
_
_
) (
(1)

=
k j
j kj
P L l g ) (
(2)

where,

l: is customer required demand;
high_load: is the value of peak load in high growth
scenario;
medium_load: is the peak load in medium growth
scenario;
L
kj
: is the load curtailment at bus k to alleviate
line overloads arising due to the
contingency j;
P
j
: is the probability of existence of outage j;
k: is the number of nodes;
g(l): is the expected unserved power which
reflects the level of load curtailment due to
the branches contingency.

Fig. 5. A TEF curve

A TEF curve can be obtained with Eqn (1) - as shown in
Figure 5 where the shaded area is the value of transmission
expansion flexibility (TEF). We can see from the definition
that the less value of TEF means the more flexible the planed
system be.
IV. CASE STUDY AND ANALYSIS
A 3-machine 5-bus system and the IEEE reliability test
system are used in this section to validate the proposed TEF.
The corresponding benefit that the flexibility study can bring
transmission planers will also be discussed in detail in the
sequel.

A. TEF Analysis
The test system is composed of three generators and five
branches. All the four buses are connected with aggregated
loads of different values as shown in Fig. 6.
Suppose that a new transmission line is needed to connect
from a generator bus to the load bus bus 4, the TEF is used
to valuate the impact of flexibility on transmission planing. It
is assumed that the length of each transmission line between
generators to bus 4 is the same for easy of analysis without
losing generosity.
With the increment of customer demand at bus 4, there are
3 expansion plans under consideration. Plans 1, 2 and 3
indicates an additional line between bus1 to bus4, bus2 to bus4
and bus3 to bus4 respectively see Fig 6 (a) , (b) and (c).
Customer required demand at load bus 4 is 300MW. We
assume a 3% annual increment for the medium demand
growth scenario, and the high demand growth scenario will
4
lead the load increase a little bit higher, at 5% per year in the
next 10 years. The generation parameters are given in Table I.


(a) (b) (c)

Fig. 6. (a) plan1 (b) plan 2 (c) plan3 where the dotted lines are new
transmission lines to be added to the system

Table I Generation Parameters
Generation Load Failure Rate Repair Rate
Bus 1 5x50 MW 80MW 0.050 4.424
Bus 2 10x25 MW 100MW 0.018 2.400
Bus 3 5x50MW 100MW 0.050 4.424

It is assumed that the capital costs for the three plans are
the same, because the lengths of new transmission line are
same and other cost factors are assumed to be the same as well.
By calculating the reliability of each plan under the
medium growth scenario, plan 2 is the most reliable system in
the three alternatives. TEF is calculated with Eqn (1) and the
results are given in Figure 7. The test systems TEF and
reliability values under medium growth scenario are given in
Table II.

Table II Test Results
Plan1 Plan2 Plan3
EENS*(MW) 0.2401 0.1737 0.2040
TEF 31.84 30.83 28.31

*: the EENS when the load at bus 4 follows the medium growth scenario (to
300 MW at the end of year 10)

0
1
2
3
4
5
6
7
8
300 310 320 330 340 350 360 370 380 390 400
Customer Required Load (MW)
U
n
s
e
r
v
e
d

D
e
m
a
n
d

(
M
W
)
plan1 plan2 plan3

Fig.7. Results Transmission Expansion Flexibility Curve
As seen in Figure 7, plan 3 has the best ability to adapt the
change and with the least unserved demand. The graph implies
that fewer penalties for customer outage costs are needed for
plan 3. The knee of plan 2, point , is an important indicator
for planner and operator. It can be seen that before the knee,
the unserved demand goes in parallel without much difference
for each plan, after the knee point the unserved demand
increased very fast. Without doing flexibility analysis, planner
probably will choose the plan 2 as the final plan due to its
lowest LOLP value at the same cost among the three plans.
However, if the flexibility benefits are considered, the final
result may be changed completely.

B. Transmission Planning considering TEF Impact
The IEEE-Reliability Test System (RTS) [7] is used as to
test the effectiveness of TEF in transmission planning
applications see Fig. 7.
Transmission planning reflects objectives of different
social groups, such as investors, customers and planners. In
the mean time, serving the customer reliably and economically
are the two main aims in transmission planning. The continual
changes from the market also require transmission expansion
flexibility be one additional objective in planning. In a market
environment, designing a flexible transmission plan to allow
future developments and minimizing the worse case penalty
on the system can be as important as meeting the reliability
requirement in transmission planning. As a result, if expected
energy not supplied (EENS) is used to present the reliability of
a system, then the objective functions of transmission planning
can be update to the following optimisation problem.

Min ) (
1
jt jt jt
T
t
jt j
U O M I PVC + + + =

=
(3)
Min

=
k
ki
i
fi ki
D F L EENS (4)
Min

=
load high
load medium
dt t g TEF
_
_
) (
(5)
Subject to
max min
P P P

max min
Q Q Q

max min
V V V

Where:
PVC
j
: the total present value of plan j;
I
jt
: total investment cost;
M
it
: maintenance cost of plan j;
O
jt
: operational cost;
U
jt
: outage cost of unserved load;
T: the horizontal years of planning;
L
ki
: the load curtailment at bus k or the load not supplied at an
isolated bus k;
F
ki
: the frequency of occurrence of outage i at bus k;
D
ki
: the duration in hours of the load curtailment.
The multi-objective optimization problem can be
transformed into a scalar optimization problem by weighted
sum approach, [9]. This method consists of adding objectives
together using different weighing, which is shown in Eqn (6).

{ } TEF W EENS W PVC W T
f r j c
* * * min + + = (6)
where W
c
, W
r,
and W
f
are weighting factors for Cost,
Reliability and Expansion Flexibility, which enable reflect the
planners preference, and W
c
+ W
r
+ W
f
= 1. The plan that has
the minimum target value will be chosen as the final
expansion plan.
For easy of analysis, it is assumed that the current IEE
RTS systems total demand is 2120MW. In the next 10 years,
the load increase will follow a 3% p.a. in medium growth
scenario and a 5%p.a. in high growth scenario.
Knee
5
Plan 1: The original IEEE RTS network;
Plan 2: The line from bus 11 to bus 13 has been replaced by
another line from bus 12 to 13.
Plan 3: The line from bus 8 to bus 10 has been replaced by the
line from bus 8 to bus 9.
Plan 4: Two branches replacement: The line from bus 2 to bus
4 is replaced by line from bus 8 to bus 9. The line from
bus 11 to 13 is replaced by the line from 15 to bus 24.
Plan 5: The line from bus 2 to bus 4 is replaced by a line from
bus 8 to bus 9. The line from bus 11 to 13 is replaced
by the line from 15 to bus 21.


Fig.7. IEEE Reliability Test System

Table III All Test Results For RTS.

The planning results are shown in table III. In order to get
reasonable results, it would be better to normalize the data
over a wide range. The method used for normalization as
shown in equation (7)

{ }
j
j
n
V
V
V
max
=
(7)

where V
n
is the normalized value of reliability index, cost and
TEF. The normalised results from Table II are represented in
Table IV and Fig. 8.

Table IV Normalized RTS Results.

Cost
(PVC)
Reliability
(EENS)
Flexibility
(TEF)
Plan 1 0.8930 0.9008 0.6621
Plan 2 0.8930 0.9363 1.0000
Plan 3 0.8930 0.9179 0.4636
Plan 4 0.9836 1.0000 0.8944
Plan 5 1.0000 0.9013 0.7984

Suppose that the three parameters are equal important for,
the weighting factors for each parameter will be same, then
they will be set as W
c
=W
r
=W
f
= 0.333. From Eqn (6), we
have,
T
1
= 0.333*(0.893+0.9008+0.6621) = 0.8188
T
2
= 0.333*(0.893+0.9363+1) = 0.9433
T
3
= 0.333*(0.893+0.9179+0.4636) = 0.7583
T
4
= 0.333*(0.9836+1+0.8944) = 0.9593
T
5
= 0.333*(1+0.9013+0.7984) = 0.8999

It can be seen that plan3 has the minimum T value of
0.7583. Thus, it will be chosen as the final decision. Different
planner may set different weight factor for reliability, cost and
flexibility, then the final decision may be changed. As seen
from Table IV, the five plans have similar reliability level with
similar cost, however, the TEF level are obviously different.
Consequently, without flexibility analysis it is difficult to
make decision from these plans. From this point of view, TEF
can help planner or decision maker to make final decision.
0
5
10
15
20
25
2
8
5
0
2
9
0
9
2
9
7
1
3
0
3
2
3
0
9
1
3
1
5
3
3
2
1
5
3
2
7
3
3
3
3
2
3
3
9
1
3
4
5
3
3
4
8
4
Customer Required Load (MW)
U
n
s
e
r
v
e
d

D
e
m
a
n
d

(
M
W
)
plan1 plan2 plan3
plan4 plan5

Fig. 8. TEF Graphs of RTS
A, B, and C in Fig. 8 are the knees points of plan 2, plan 4
and plan 5, respectively. This reflects another feature, from
increasing demand point of view (along with horizontal axis),
the plan with larger knee point value is better than small one,
because the unserved load will be explosive after the knee.
From increasing unsupplied load point of view (vertical axis),
the plan with smaller knee point value is better than the large
one. It implies different unsupplied load at the same demand
level. In one word, the knee point more far away from the
origin point and more closer to the x axis is better than others.
Again, in competitive market, the benefit of flexibility can
change the traditional planning program. When planners take
account of a transmission plan as a multi-objective optimal
problem, flexibility can be treated as an individual objective.
Reliability
(EENS Kwh/occ)
Cost (M$) TEF
Plan 1 100.645 19.62 28.29343
Plan 2 104.614 19.62 42.73047
Plan 3 102.553 19.62 19.80978
Plan 4 111.727 21.60 38.21853
Plan 5 100.700 21.96 34.44553
B C A
6
Moreover, at the final decision, the flexibility index can be
transferred to monetary term though the physical meaning.

V. CONCLUSIONS
Transmission planning is the key to keep the system
capacity ahead of increasing demand in the future. A good
plan should take into accounts for all kinds of uncertainties
that could happen in the future. Since a transmission system is
built for an expected life over 20 years, it is hard to fully
clarify and imagine for the uncertainty scenarios, and even
worse for the planners trying to clarify and quantify the
uncertainty into monetary terms. This paper gives a clear
definition for flexibility, and quantifies it as the function of
customers interrupted load. A more flexible plan is defined as
the one, which can offer better adjustability for updating when
demand level has increased.
In case study, TEF combining with reliability and cost have
been treated as transmission planning objectives. By using
weighted sum approach, the transmission planning objectives
(multi-objectives) optimization problem has been transformed
to a single objective optimization problem. The results shown,
systems may have different TEF value even with similar
reliability and cost. Once take account of the flexibility
planning, the final decision may be changed completely.
Therefore, the TEF offers another criterion and an opportunity,
rather than reliability and cost analysis, for planners and
operators to compare alternative plans. Furthermore, by
drawing TEF graph, future curtailment can be detected before
reliability constraints are violated.
The flexibility study is in the initial stage, the market
flexibility and operational flexibility will be conducted in
future research.
VI. REFERENCES
[1] B. F. Hobbs, J. C. Honious and J. Bluestein, "Estimating the Flexibility
of Utility Resource Plans: An Application to Natural Gas Cofiring for
SO2 Control." IEEE Transactions on Power Systems, vol. 9, No. 1, pp.
167 173, February1994.
[2] D. M. Upton, The Management of Manufacturing Flexibility.
California Management Review, vol.36, No. 2, pp.72 -89, 1994.
[3] M. Shahidehpour, H. Yamin and Z. Li, Market Operations in Electric
Power Systems Forecasting, Scheduling, and Risk Management, NY,
John Wiley & Sons, 2002,
[4] D. T. Gardner, "Flexibility in Electric Power Planning: Coping With
Demand Uncertainty." Energy - The International Journal, vol. 21, No.
12, pp. 1207 1218, 1996.
[5] F. P. Sener, "System Planning Using Existing Flexibility" IEEE
Transactions on Power Systems, vol. 11, No. 4, pp. 1874 1878, 1996.
[6] Powerlink Queensland, Annual Planning Report 2004, [Online].
Available: http://www.powerlink.com.au/
[7] IEEE Committee Report , "The IEEE Reliability Test System - 1996",
IEEE Transactions On Power Systems, vol. 14, No. 3, pp. 1010 1020,
1999.
[8] D. Kirschen and G. Strbac, Fundamentals of Power System
Economics, Wiley, 2004, pp. 229
[9] C. A. C. Coello, An Updated Survey of GA-Based Multiobjective
Optimization Techniques, ACM Computing Surveys, Vol. 32, No. 2,
June 2000, pp. 109 143.
[10] J. E. Dagle , Data Management Issues Associated With The August 14,
2003 blackout investigation, Power Engineering Society General
Meeting,IEEE.2004, pp.1680 -1684
VII. BIOGRAPHIES
Miao Lu, obtained her Master of Information Technology degree from
Griffith University, Australia in 2003 and B.E. in Electrical Engineering from
North China Electrical Power University in 2001. She is now pursuing her
PhD in Electrical Engineering degree at The School of Information
Technology and Electrical Engineering, The University of Queensland,
Australia. Her research interests include power system analysis, power system
planning, reliability assessment and risk management, and power system
computations.
ZhaoYang Dong (M'99) received his PhD in Electrical and Information
Engineering from The University of Sydney, Australia in 1999. He is now a
senior lecturer at the School of Information Technology Electrical
Engineering, The University of Queensland, Australia. His research interests
include power system security assessment and enhancement, electricity
market, artificial intelligence and its application in electric power engineering,
power system planning and management, and power system stability &
control.
Tapan Kumar Saha (M93SM97) was born in Bangladesh and came to
Australia in 1989. Dr Saha is a Professor of Electrical Engineering in the
School of Information Technology and Electrical Engineering, University of
Queensland, Australia. Before joining the University of Queensland he taught
at the Bangladesh University of Engineering and Technology, Dhaka,
Bangladesh for three and a half years and at James Cook University,
Townsville, Australia for two and a half years. He is a Fellow of the
Institution of Engineers, Australia. His research interests include power
systems, power quality, and condition monitoring of electrical plants.