Transmission and storage expansion planning under imperfect market competition: Social planner versus merchant investor

Gonzalez-Romero, Isaac Camilo; Wogrin, Sonja; Gómez, Tomás

doi:10.1016/j.eneco.2021.105591

Cited by 14 publications

(3 citation statements)

References 25 publications

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“…Although the TEP model is detailed, the expansion planning requires refinement phases according to qualitative parameters (e.g., political decision, risk-aversion, business strategies, etc.) [44]. The article is centered around the main dimensions of the problem as shown in Figure 1.…”

Section: Solution Methodsmentioning

confidence: 99%

The Human Factor in Transmission Network Expansion Planning: The Grid That a Sustainable Energy System Needs

et al. 2022

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The decarbonization of the energy sector puts additional pressure on the transmission network. The main cause for this is that renewable sources are often more abundant in geographical areas far away from the main demand centers, so new transmission lines are required to connect the new renewable energy capacity. In addition, by connecting different geographical zones, the transmission network could smooth the intermittency and the variability of renewable energy production. Thus, the changing energy landscape leads to a need to reinforce the transmission network through the Network Transmission Expansion Planning. Ideally, all the idiosyncrasies of the electricity system are considered in the operation and expansion planning process. However, several critical dimensions of the planning process are routinely ignored since they may introduce parameters that are difficult to quantify and complexity that state-of-the-art planning methods cannot handle. This paper identifies the most relevant elements related to the human factor, which have been grouped around the main topics: the human behind the technical, the human at the institutional level, and the human at the individual level. This paper also provides an additional formulation that can be used to upgrade existing models to include the human element and discusses the implications of these upgrades.

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Section: Solution Methodsmentioning

confidence: 99%

The Human Factor in Transmission Network Expansion Planning: The Grid That a Sustainable Energy System Needs

et al. 2022

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“…Finding the "true" distortion-free expansion result is evidently a challenging task, and even though the present paper provides a robust methodology for these benchmarks, methodological refinements could be implemented as potential future work. Nonetheless, it seems undeniable that regulatory practices in many countries incorporate significant deviations from an "ideal" representation, due to political influence, legacy contracts, methodological simplifications, lack of data and other reasons-see, for example [6,7].…”

Section: Core Methodologymentioning

confidence: 99%

Reliability Metrics for Generation Planning and the Role of Regulation in the Energy Transition: Case Studies of Brazil and Mexico

Werlang¹,

Cunha²,

Bastos³

et al. 2021

Energies

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In recent years electricity sectors worldwide have undergone major transformations, referred to as the “energy transition”. This has required energy planning to quickly adapt to provide useful inputs to the regulation activity so that a cost-effective electricity market emerges to facilitate the integration of renewables. This paper analyzes the role of system planning and regulations on two specific elements in the energy market design: the concept of firm capacity and the presence of distributed energy resources, both of which can be influenced by regulation. We assess the total cost of different regulatory mechanisms in the Brazilian and Mexican systems using optimization tools to determine optimal long-term expansion for a given regulatory framework. In particular, we quantitatively analyze the role of the current regulation in the total cost of these two electricity systems when compared to a reference “efficient” energy planning scenario that adopts standard cost-minimization principles and that is well suited to the most relevant features of the new energy transformation scenario. We show that two very common features of regulatory designs that can lead to distortions are: (i) renewables commonly having a lower “perceived cost” under the current regulations, either due to direct incentives such as tax breaks or due to indirect access to more attractive contracts or financing conditions; and (ii) requirements for reliability are often defined more conservatively than they should be, overstating the hardships imposed by renewable generation on the existing system and underestimating their potential to form portfolios.

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“…The determination of the hourly production of each generator that participates in the market results from an operation programming that covers different time intervals from 1 day, 1 week, and the medium/long term. This makes it possible to guarantee that the programming of the operation meets the objective of supplying the demand with adequate quality service at a minimum cost within the time horizon covered by each program [7].…”

Section: Market Rules To Incentive Ncre Integration Together With a S...mentioning

confidence: 99%

Variable Renewable Energy: How the Energy Markets Rules Could Improve Electrical System Reliability

Llarens¹,

Souilla²,

Masiriz³

et al. 2023

Advances in Green Electronics Technologies in 2023

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In the last 10 years, significant changes have been observed in the operation of electrical systems resulting from the increasing incorporation of Variable Renewable Energy (NCRE—Solar PV, WIND) characterized by strong volatility in its energy production, due to climatic effects, which affect the reliability in the operation of the electrical system. These technologies also show a significant reduction in their capital costs, which are currently competitive compared to conventional alternatives for energy production, with the advantage of contributing to reducing the production of greenhouse gases. Therefore, increasing reliability operational problems are expected in the future, which must be resolved to supply the demand safely and at minimum cost. LATAM’s countries are making slow progress in updating their regulatory frameworks for the electricity sector to include changes that improve the integration of NCRE generation without reducing the quality of service. This document describes possible regulatory changes that could be implemented to promote a system safe operation including (a) intra-hours marginal costs, (b) day-ahead/intraday energy markets, (c) incentives to better forecast the NCRE generation production profile, (d) participation of NCRE generation in the capacity market, and (e) including BESS as ancillary service for frequency/ramp power control.

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Transmission and storage expansion planning under imperfect market competition: Social planner versus merchant investor

Cited by 14 publications

References 25 publications

The Human Factor in Transmission Network Expansion Planning: The Grid That a Sustainable Energy System Needs

The Human Factor in Transmission Network Expansion Planning: The Grid That a Sustainable Energy System Needs

Reliability Metrics for Generation Planning and the Role of Regulation in the Energy Transition: Case Studies of Brazil and Mexico

Variable Renewable Energy: How the Energy Markets Rules Could Improve Electrical System Reliability

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