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Modeling generation expansion in the context of a security of supply mechanism based on long-term auctions. Application to the Colombian case

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  • Rodilla, P.
  • Batlle, C.
  • Salazar, J.
  • Sánchez, J.J.

Abstract

In an attempt to provide electricity generation investors with appropriate economic incentives so as to maintain quality of supply at socially optimal levels, a growing number of electricity market regulators have opted for implementing a security of supply mechanism based on long-term auctions. In this context, the ability to analyze long-term investment dynamics is a key issue not only for market agents, but also for regulators. This paper describes a model developed to serve this purpose. A general system-dynamics-inspired methodology has been designed to be able to simulate these long-term auction mechanisms in the formats presently in place. A full-scale simulation based on the Colombian system was conducted to illustrate model capabilities.

Suggested Citation

  • Rodilla, P. & Batlle, C. & Salazar, J. & Sánchez, J.J., 2011. "Modeling generation expansion in the context of a security of supply mechanism based on long-term auctions. Application to the Colombian case," Energy Policy, Elsevier, vol. 39(1), pages 176-186, January.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:1:p:176-186
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    References listed on IDEAS

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    1. Derek W. Bunn and Fernando Oliveira, 2001. "An Application of Agent-based Simulation to the New Electricity Trading Arrangements of England and Wales," Computing in Economics and Finance 2001 93, Society for Computational Economics.
    2. Andrew Ford, 2002. "Boom and Bust in Power Plant Construction: Lessons from the California Electricity Crisis," Journal of Industry, Competition and Trade, Springer, vol. 2(1), pages 59-74, June.
    3. Park, Jung-Yeon & Ahn, Nam-Sung & Yoon, Yong-Beum & Koh, Kyung-Ho & Bunn, Derek W., 2007. "Investment incentives in the Korean electricity market," Energy Policy, Elsevier, vol. 35(11), pages 5819-5828, November.
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    Cited by:

    1. Zapata, Sebastian & Castaneda, Monica & Franco, Carlos Jaime & Dyner, Isaac, 2019. "Clean and secure power supply: A system dynamics based appraisal," Energy Policy, Elsevier, vol. 131(C), pages 9-21.
    2. Shahriyar Nasirov & Eugenio Cruz & Claudio A. Agostini & Carlos Silva, 2019. "Policy Makers’ Perspectives on the Expansion of Renewable Energy Sources in Chile’s Electricity Auctions," Energies, MDPI, vol. 12(21), pages 1-17, October.
    3. Heidarizadeh, Mohammad & Ahmadian, Mohammad, 2019. "Capacity certificate mechanism: A step forward toward a market based generation capacity incentive," Energy, Elsevier, vol. 172(C), pages 45-56.

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