Cost-Benefit Analysis (CBA) for grid development projects assesses whether investments in transmission and distribution infrastructure deliver net economic value. It compares lifecycle costs—including capital, operation and maintenance, environmental, and system integration costs—against benefits such as reduced technical losses, improved reliability, expanded access, and deferred generation capacity. Economic valuation uses shadow pricing to reflect true resource costs and applies measures like the Value of Lost Load to capture reliability gains. Projects are evaluated over a long-term horizon (20–40 years) using discounted indicators such as Net Present Value, Economic Internal Rate of Return, and Benefit-Cost Ratio. Sensitivity and risk analyses test uncertainties like demand growth and cost overruns. A project is considered viable if it yields positive net benefits and meets established economic performance thresholds.
