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El modelo HRV para expansión óptima de redes de transmisión: una aplicación a la red eléctrica de Ontario
[The HRV Model for the Optimal Expansion of Transmission Networks: an Application to the Ontario Electricity Grid]

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Author Info

  • Rosellon, Juan
  • Tregear, Juan
  • Zenon, Eric

Abstract

This paper presents an application of a mechanism that provides incentives to promote transmission network expansion in the electricity system of the Ontario province. Such a mechanism combines a merchant approach with a regulatory approach. It is based on the rebalancing of a two-part tariff within the framework of a wholesale electricity market with nodal pricing. The expansion of the network is carried out through auctions of financial transmission rights for congested links. The mechanism is tested for a simplified transmission grid with ten interconnected zones, ten nodes, eleven lines and seventy eight generators in the Ontario province. The simulation is carried out for both peak and non-peak scenarios. Considering Laspeyres weights, the results show that that prices converge to the marginal cost of generation, the congestion rent decreases, and the total social welfare increases.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 26471.

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Date of creation: Nov 2010
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Handle: RePEc:pra:mprapa:26471

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Related research

Keywords: Keywords: Electricity transmission; financial transmission rights (FTRs); incentive regulation; loop-flow problem; nodal prices; Ontario;

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References

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  1. Juan Rosellon & Hannes Weigt, 2008. "A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks–Theory, Modeling and Application," Working papers, CIDE, División de Economía DTE 424, CIDE, División de Economía.
  2. Juan Rosellon & Hannes Weigt, 2007. "A Combined Merchant-Regulatory Mechanism for Electricity Transmission Expansion in Europe," Working papers, CIDE, División de Economía DTE 396, CIDE, División de Economía.
  3. Juan Rosellon & Tarjei Kristiansen, 2007. "Merchant Electricity Transmission Expansion: A European Case Study," Working papers, CIDE, División de Economía DTE 391, CIDE, División de Economía.
  4. Vogelsang, Ingo, 2002. "Incentive Regulation and Competition in Public Utility Markets: A 20-Year Perspective," Journal of Regulatory Economics, Springer, Springer, vol. 22(1), pages 5-27, July.
  5. Hogan, William W, 2002. "Electricity Market Restructuring: Reforms of Reforms," Journal of Regulatory Economics, Springer, Springer, vol. 21(1), pages 103-32, January.
  6. Bushnell, James B. & Stoft, Steven E., 1997. "Improving private incentives for electric grid investment," Resource and Energy Economics, Elsevier, Elsevier, vol. 19(1-2), pages 85-108, March.
  7. Rosellón Juan, 2003. "Different Approaches Towards Electricity Transmission Expansion," Review of Network Economics, De Gruyter, De Gruyter, vol. 2(3), pages 1-32, September.
  8. Vogelsang, Ingo, 2001. "Price Regulation for Independent Transmission Companies," Journal of Regulatory Economics, Springer, Springer, vol. 20(2), pages 141-65, September.
  9. Anna Creti & Natalia Fabra, 2003. "Capacity Markets for Electricity," Industrial Organization, EconWPA 0309002, EconWPA, revised 26 Nov 2003.
  10. Makoto Tanaka, 2007. "Extended Price Cap Mechanism for Efficient Transmission Expansion under Nodal Pricing," Networks and Spatial Economics, Springer, Springer, vol. 7(3), pages 257-275, September.
  11. Leautier, Thomas-Olivier, 2001. "Transmission Constraints and Imperfect Markets for Power," Journal of Regulatory Economics, Springer, Springer, vol. 19(1), pages 27-54, January.
  12. Green, R., 2004. "Electricity Transmission Pricing: How much does it cost to get it wrong?," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 0466, Faculty of Economics, University of Cambridge.
  13. Bushnell, James, 1999. "Transmission Rights and Market Power," The Electricity Journal, Elsevier, Elsevier, vol. 12(8), pages 77-85, October.
  14. Ingo Vogelsang, 2005. "Electricity Transmission Pricing and Performance-Based Regulation," CESifo Working Paper Series 1474, CESifo Group Munich.
  15. Joskow, Paul & Tirole, Jean, 2004. "Merchant Transmission Investment," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 263, Institut d'Économie Industrielle (IDEI), Toulouse.
  16. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, Econometric Society, vol. 70(4), pages 1299-1340, July.
  17. Hogan, William W, 1992. "Contract Networks for Electric Power Transmission," Journal of Regulatory Economics, Springer, Springer, vol. 4(3), pages 211-42, September.
  18. Bushnell, James B & Stoft, Steven E, 1996. "Electric Grid Investment under a Contract Network Regime," Journal of Regulatory Economics, Springer, Springer, vol. 10(1), pages 61-79, July.
  19. Chao, Hung-Po & Peck, Stephen, 1996. "A Market Mechanism for Electric Power Transmission," Journal of Regulatory Economics, Springer, Springer, vol. 10(1), pages 25-59, July.
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Cited by:
  1. Cantor Vargas, Natalia & Herrera Saavedra, Juan Pablo & Campo Robledo, Jacobo & Lis-Gutiérrez, Jenny-Paola, 2013. "Una propuesta metodológica de discriminación de segundo grado: el caso de tarifas multiclase para el registro marcario en Colombia durante el año 2012
    [A methodological proposal for second-degre
    ," MPRA Paper 46271, University Library of Munich, Germany.

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