Transmission capacity is a classic example of a neat economics problem.

If there was a benevolent dictator making ideal decisions, they would build enough transmission capacity to minimize generation+transmission costs while still serving all users in the country.

However, if there is a private company building a transmission line, they have an incentive to under-build capacity to maximize their profits - since if they overbuild, then the price in all the regions is identical, and their profits by transporting energy are nil.

Yet, due to the nature of transmission lines, it doesn't make sense for 50 companies to build 50 independent transmission lines on the same route to compete on transmission pricing - the total cost of fifty 1 megawatt lines is far higher than one 50 megawatt line.

It's a good example of an economics problem where the free/restricted market doesn't work anywhere near as well as the benevolent dictator model.

There are lots of similar problems - for example shipping goods from a place where they are less valuable to a place they are more valuable.