Transmission Network Investment as an Anticipation Problem
This paper proposes a probabilistic model to evaluate if a proactive TSO that anticipates the connection of new generators with short construction duration compared to the time needed to reinforce the network is more efficient than a reactive TSO that does not make any anticipation but that may then face higher congestion while the network is being reinforced. This evaluation is made in presence of anticipation costs both related to the study of the project of network investment and to the administrative procedures needed to obtain the building agreement. Our results in terms of social costs clearly show a limit of probability for the connection of generators beyond which a proactive TSO is more efficient than a reactive TSO. Evaluated on realistic cases of connection, this limit of probability is found quite low, which indicates that the proactive behaviour for a TSO shall generally be the optimal one.
|Date of creation:||19 Jan 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.eui.eu/RSCAS/
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.:
- D. Finon & Y. Perez, 2007.
"The social efficiency of instruments of promotion of renewable energies: A transaction-cost perspective,"
- Finon, Dominique & Perez, Yannick, 2007. "The social efficiency of instruments of promotion of renewable energies: A transaction-cost perspective," Ecological Economics, Elsevier, vol. 62(1), pages 77-92, April.
- Roques, Fabien A. & Newbery, David M. & Nuttall, William J., 2008. "Fuel mix diversification incentives in liberalized electricity markets: A Mean-Variance Portfolio theory approach," Energy Economics, Elsevier, vol. 30(4), pages 1831-1849, July.
- Boyle, Glenn & Guthrie, Graeme & Meade, Richard, 2006. "Real Options and Transmission Investment: the New Zealand Grid Investment Test," Working Paper Series 3846, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
- McLaren Loring, Joyce, 2007. "Wind energy planning in England, Wales and Denmark: Factors influencing project success," Energy Policy, Elsevier, vol. 35(4), pages 2648-2660, April.
When requesting a correction, please mention this item's handle: RePEc:rsc:rsceui:2010/04. 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: (RSCAS web unit)
If references are entirely missing, you can add them using this form.