Thermal constraints in existing transmission and distribution lines and equipment are the ultimate limit of their power transfer capability. When power equipment carries current in excess of its thermal rating, it becomes over-heated and its insulation deteriorates rapidly. This leads to a reduction in the life of the equipment and an increasing incidence of faults.
If an overhead line passes too much current, the conductor lengthens, the sag of the catenary increases, and the clearance to the ground is reduced. Any reduction in the clearance of an overhead line to the ground has important consequences both for an increase in the number of faults but also as a danger to public safety. Thermal constraints depend on environmental conditions, that change through the year. Hence the use of dynamic ratings can increase circuit capacity at times.