The presence of earth in case of overhead transmission line

The correct answer is 'option 1' (increases capacitance).

Concept: 

The capacitance of overhead transmission lines when the earth effect is neglected is given by

The capacitance of overhead transmission lines when the earth effect is considered is given by

In the above expressions, D is the interspacing distance between conductors, r is the radius of the conductors, and h is the height of the transmission line from the ground.

It can be observed that the presence of earth modifies the radius of the conductor from r to . Therefore the denominator as whole decreases and net capacitance increases.

 Important PointsAs the earth is considered to be a pool of infinite electrons, the presence of an overhead transmission line causes charge carriers to separate by a dielectric(air), thereby increasing the capacitance.