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Transmission Expansion and Electricity Trade: A Case Study of the Greek Power System

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  • Nikolaos E. Koltsaklis

    (Energy and Environmental Policy Laboratory, School of Economics, Business and International Studies, University of Piraeus, 18532 Piraeus, Greece)

  • Athanasios S. Dagoumas

    (Energy and Environmental Policy Laboratory, School of Economics, Business and International Studies, University of Piraeus, 18532 Piraeus, Greece)

Abstract

The integration of European electricity markets, through the market coupling process, can create significant efficiency gains in terms of social welfare to European consumers and industries. The market coupling process is anticipated to more efficiently utilize the generation and transmission activities, reducing the requirements of large idle generation capacity. This paper uses an optimization-based methodological framework to address the problem of the optimal planning of a power system at an annual level in competitive and volatile power markets, under dynamic formulation of the strategy employed by all market participants. The model is used for the scenario-based transmission expansion of the Greek power system with neighboring power systems in Southeast Europe, identifying its impact on a series of operational and economic aspects. The model determines the optimal power generation mix in each scenario, the electricity trade with the neighboring countries, the evolution of the system marginal price and the resulting environmental impact. This enables the identification of the remuneration of all types of producers from the wholesale market through a detailed calculation of all the relevant cost components. The proposed approach can provide useful insights on the optimal portfolio determination by potential investors at a national and/or regional level, highlighting potential risks and appropriate price signals on critical infrastructure projects under real electricity market operating conditions.

Suggested Citation

  • Nikolaos E. Koltsaklis & Athanasios S. Dagoumas, 2018. "Transmission Expansion and Electricity Trade: A Case Study of the Greek Power System," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 64-71.
  • Handle: RePEc:eco:journ2:2018-05-9
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    References listed on IDEAS

    as
    1. Abrell, Jan & Rausch, Sebastian, 2016. "Cross-country electricity trade, renewable energy and European transmission infrastructure policy," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 87-113.
    2. Coester, Andreas & Hofkes, Marjan W. & Papyrakis, Elissaios, 2018. "An optimal mix of conventional power systems in the presence of renewable energy: A new design for the German electricity market," Energy Policy, Elsevier, vol. 116(C), pages 312-322.
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    4. Brancucci Martínez-Anido, C. & Vandenbergh, M. & de Vries, L. & Alecu, C. & Purvins, A. & Fulli, G. & Huld, T., 2013. "Medium-term demand for European cross-border electricity transmission capacity," Energy Policy, Elsevier, vol. 61(C), pages 207-222.
    5. de Groot, Mats & Crijns-Graus, Wina & Harmsen, Robert, 2017. "The effects of variable renewable electricity on energy efficiency and full load hours of fossil-fired power plants in the European Union," Energy, Elsevier, vol. 138(C), pages 575-589.
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    Cited by:

    1. Panagiotis Adraktas & Athanasios Dagoumas, 2019. "Integration of Electric Vehicles in the Unit Commitment Problem with Uncertain Renewable Electricity Generation," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 315-333.

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    More about this item

    Keywords

    CO 2 emissions; Electricity trade; Power market dynamics; Power generation mix; Transmission expansion;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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