Intertemporal Planning of Transmission Expansions in Restructured Electricity Markets
Publication: Journal of Energy Engineering
Volume 135, Issue 3
Abstract
In the new environmental era, electricity markets change rapidly, requiring dynamic strategic responses from market agents and regulators. In this paper, we study the intertemporal dimension of the network planner decision process. In particular, we formulate a dynamic model of transmission investments and use this model to compare the behavior of a network planner when considering and when ignoring the dynamic nature of transmission investments. This paper’s analysis focuses on the situation faced by some hubs with growing demand which meet their demand with power generated by distant sources subject to uncertainty. This is the case of a large city, which demand is satisfied by hydro or wind power supplied from sources located far away. For this kind of systems (typified as a simple two-node network that satisfies certain properties), we characterize the structure of a socially efficient transmission investment policy. It is shown that, in such a network, an optimal open-loop transmission investment policy has a multiperiod structure. The results are illustrated with a numerical example.
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Acknowledgments
The writer especially thanks Professor Shmuel Oren for constructive advice. The work reported in this paper was supported by the Chilean government FONDECYT Grant Nos. UNSPECIFIED11060347 and UNSPECIFIED7070239.
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Information & Authors
Information
Published In
Journal of Energy Engineering
Volume 135 • Issue 3 • September 2009
Pages: 73 - 82
Copyright
© 2009 ASCE.
History
Received: Jul 18, 2008
Accepted: Feb 11, 2009
Published online: Aug 14, 2009
Published in print: Sep 2009
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