The growing penetration of renewable energy requires upgrades to the
transmission network to ensure the deliverability of renewable generation. As
an efficient alternative to transmission expansion, flexible transmission
technologies, whose benefits have been widely studied, can alleviate
transmission system congestion and enhance renewable energy integration.
However, under the current market structure, investments for these technologies
only receive a regulated rate of return, providing little to no incentive for
efficient operation. Additionally, a regulated rate of return creates an
incentive for building more transmission lines rather than efficient
utilization of the existing system. Therefore, investments in flexible
transmission technologies remain rather limited. To facilitate the deployment
of flexible transmission, improve system efficiency, and accommodate renewable
energy integration, a proper incentive structure for flexible transmission
technologies, compatible with the current market design, is vital. This paper
reviews the current market-based mechanisms for various flexible transmission
technologies, including impedance control, dynamic line rating, and
transmission switching. This review pinpoints current challenges of the
market-based operation of flexible transmission and provides insights for
future endeavors in designing efficient price signals for flexible transmission
operation.Comment: 2023 55th North American Power Symposium (NAPS