Evaluation Of An Expansion Of The Electricity Transmission System In Mexico
In the past, most evaluations of the electric utility investments have been based on the assumptions that the suppliers of electricity would provide the quantity of energy demanded at an acceptable level of reliability. The question addressed in most of the investment appraisals has been: “is this investment the least cost way to supply the electricity demanded?” In real life the situation is usually very different in most countries. Shortages, outages and deterred demand have been the rule, rather than the exception. This study of a major rehabilitation program by Comision Federal de Electricidad (CFE) of Mexico (Mexico Public Electric Utility) presents a practical method of analysis for an investment to rehabilitate an existing electricity transmission system. First, the analysis is done in an integrated fashion where the financial, economic, distributive, and risk aspects of the project are examined together on a consistent basis. Second, the value of each of the components of the supply improvement, i.e. reduction in shortages, outages, transmission losses, is considered separately and then combined in the overall appraisal. Third, the risks imposed on these investments from such macro-economic variables as changes in the real exchange rate and the rate of inflation are modeled, based on real world data, and combined with the risks inherent in the project inputs, such as fuel and investment costs to make an assessment of the overall risks associated with the undertaking of these investments.
|Date of creation:||Mar 1999|
|Date of revision:|
|Contact details of provider:|| Postal: Kingston, Ontario, K7L 3N6|
Phone: (613) 533-2250
Fax: (613) 533-6668
Web page: http://www.econ.queensu.ca/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lester D. Taylor, 1975. "The Demand for Electricity: A Survey," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 74-110, Spring.
- Glenn Jenkins, 1994.
"The Appraisal Of Investment Projects - A Teaching Approach,"
Development Discussion Papers
1994-05, JDI Executive Programs.
- Glenn P. Jenkins, 1994. "The appraisal of investment projects: A teaching approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 6(1), pages 115-122, 01.
When requesting a correction, please mention this item's handle: RePEc:qed:dpaper:135. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bahman Kashi)
If references are entirely missing, you can add them using this form.