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

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...

Descripción completa

Detalles Bibliográficos
Autores: Abadie, Luis María, Chamorro Gómez, José Manuel
Tipo de recurso: artículo
Fecha de publicación:2011
País:España
Institución:Universidad del País Vasco
Repositorio:Addi. Archivo Digital para la Docencia y la Investigación
OAI Identifier:oai:addi.ehu.eus:10810/11574
Acceso en línea:http://hdl.handle.net/10810/11574
Access Level:acceso abierto
Palabra clave:electricity
transmission network
congestion
expansion
load
fuel prices
generation costs
emission allowances
EU Emissions Trading Scheme (ETS)
GHG abatement
power
COMPUTER SCIENCE, MULTIDISCIPLINARY
id ES_7bfc05fafd96f9c9595a3d99e5f7e3fa
oai_identifier_str oai:addi.ehu.eus:10810/11574
network_acronym_str ES
network_name_str España
repository_id_str
spelling Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal CaseAbadie, Luis MaríaChamorro Gómez, José Manuelelectricitytransmission networkcongestionexpansionloadfuel pricesgeneration costsemission allowancesEU Emissions Trading Scheme (ETS)GHG abatementpowerCOMPUTER SCIENCE, MULTIDISCIPLINARYTransmission 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.Financial support from the Spanish Ministry of Science and Innovation through the research project ECO2011-25064. Chamorro also acknowledges financial support from the Basque Government (through the Programs for the upgrade and mobility of researchers 2011)MDPI201420142011info:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10810/11574reponame:Addi. Archivo Digital para la Docencia y la Investigacióninstname:Universidad del País VascoIngléshttp://www.mdpi.com/1996-1073/4/10/1696info:eu-repo/semantics/openAccess© 2011 by the authors; licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution license (http://creativecommons.org/licenses/by/3.0/)oai:addi.ehu.eus:10810/115742026-06-18T09:23:17Z
dc.title.none.fl_str_mv Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
title Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
spellingShingle Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
Abadie, Luis María
electricity
transmission network
congestion
expansion
load
fuel prices
generation costs
emission allowances
EU Emissions Trading Scheme (ETS)
GHG abatement
power
COMPUTER SCIENCE, MULTIDISCIPLINARY
title_short Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
title_full Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
title_fullStr Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
title_full_unstemmed Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
title_sort Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case
dc.creator.none.fl_str_mv Abadie, Luis María
Chamorro Gómez, José Manuel
author Abadie, Luis María
author_facet Abadie, Luis María
Chamorro Gómez, José Manuel
author_role author
author2 Chamorro Gómez, José Manuel
author2_role author
dc.subject.none.fl_str_mv electricity
transmission network
congestion

expansion
load
fuel prices
generation costs
emission allowances
EU Emissions Trading Scheme (ETS)
GHG abatement
power
COMPUTER SCIENCE, MULTIDISCIPLINARY
topic electricity
transmission network
congestion
expansion
load
fuel prices
generation costs
emission allowances
EU Emissions Trading Scheme (ETS)
GHG abatement
power
COMPUTER SCIENCE, MULTIDISCIPLINARY
description 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.
publishDate 2011
dc.date.none.fl_str_mv 2011
2014
2014
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10810/11574
url http://hdl.handle.net/10810/11574
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv http://www.mdpi.com/1996-1073/4/10/1696
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv MDPI
publisher.none.fl_str_mv MDPI
dc.source.none.fl_str_mv reponame:Addi. Archivo Digital para la Docencia y la Investigación
instname:Universidad del País Vasco
instname_str Universidad del País Vasco
reponame_str Addi. Archivo Digital para la Docencia y la Investigación
collection Addi. Archivo Digital para la Docencia y la Investigación
repository.name.fl_str_mv
repository.mail.fl_str_mv
_version_ 1869411556495720448
score 15,300724

Similares en LA Referencia