Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case

Energies

Luis M. Abadie¹ 

[1] Basque Centre for Climate Change (BC3), Alameda Urquijo 4,4ª-1ª, 48008 Bilbao, Spain; E-Mail:

关键词: electricity;    transmission network;    congestion;    expansion;    load;    fuel prices;    generation costs;    emission allowances;    EU Emissions Trading Scheme (ETS);    GHG abatement;   

DOI  :  10.3390/en4101696

来源: mdpi

【 摘 要 】

Transmission investments are currently needed to meet an increasing electricity demand, to address security of supply concerns, and to reach carbon-emissions targets. A key issue when assessing the benefits from an expanded grid concerns the valuation of the uncertain cash flows that result from the expansion. We propose a valuation model that accommodates both physical and economic uncertainties following the Real Options approach. It combines optimization techniques with Monte Carlo simulation. We illustrate the use of our model in a simplified, two-node grid and assess the decision whether to invest or not in a particular upgrade. The generation mix includes coal- and natural gas-fired stations that operate under carbon constraints. The underlying parameters are estimated from observed market data.

【 授权许可】

CC BY   
© 2011 by the authors; licensee MDPI, Basel, Switzerland.