On a Nordic and European level there is an ongoing discussion on the needs for increased transmission capacity with the ultimate aim of creating a Nordic or European electricity market. Increased transmission capacity can contribute to improved utilization of existing generation resources, improve the possibilities to locate new production where it is most beneficial and possibly also to improved competition. At the same time, transmission investments are costly.
This points at the importance of ensuring that the right investments are being made. This includes ensuring that profitable investments are actually made, but also that unprofitable investments are not made. In addition it is important to choose the right investments when there are several alternatives.
Economic cost-benefit analysis is a way to systematically compare benefits/revenues with the costs over the life span of an investment. Compared to business planning carried out before a commercial investment decision, the economic cost-benefit analysis also tries to capture costs and benefits that are not going to be realised in monetary terms or that affect other parties than the investor.
The aim of the report is to contribute to the further development of the methods for economic cost-benefit analysis in relation to electricity transmission investments, and to contribute to increased knowledge and understanding of these methods among different interest groups.