Cost-Effective Target Capacity Assessment in the Energy Transition: The Italian Methodology

Abstract

Long-term transmission expansion planning has to face the energy transition in a restructured electricity market environment. Increased transmission capacity within and between Member States is likely to play an essential role in maintaining the secure and economic operation of the whole European power system and ensuring the integration of growing renewable generation. This paper proposes a novel iterative methodology aimed at assessing an optimal level of interconnection between relevant bidding zones, simultaneously investigating different potential alternatives. Starting from a reference grid, a multi-criteria analysis is adopted to select the additional transmission capacities to be tested in each iteration via network and market simulations in order to confirm that transmission expansion benefits outweigh the estimated realization costs. The proposed approach is applied to the Italian case in two contrasting energy scenarios for the mid-term 2030 and very-long-term 2040 horizons: different development strategies are derived, and the least regret criterion is applied to define the most cost-effective as the target development strategy for the Transmission System Operator (TSO). Furthermore, sensitivity analyses on relevant input data variation are performed to test the robustness of the results obtained.