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El modelo HRV para expansión óptima de redes de transmisión: aplicaciones en Ontario

Author

Listed:
  • Juan Rosellón

    (Division of Economics, CIDE)

  • Juan Tregear
  • Eric Zenón

Abstract

This paper presents an application of a mechanism that provides incentives to promote transmission network expansion in the electricity system of the Ontario province. Such a mechanism combines a merchant approach with a regulatory approach. It is based on the rebalancing of a two-part tariff within the framework of a wholesale electricity market with nodal pricing. The expansion of the network is carried out through auctions of financial transmission rights for congested links. The mechanism is tested for a simplified transmission grid with ten interconnected zones, ten nodes, eleven lines and seventy eight generators in the Ontario province. The simulation is carried out for both peak and non-peak scenarios. Considering Laspeyres weights, the results show that that prices converge to the marginal cost of generation, the congestion rent decreases, and the total social welfare increases.

Suggested Citation

  • Juan Rosellón & Juan Tregear & Eric Zenón, 2010. "El modelo HRV para expansión óptima de redes de transmisión: aplicaciones en Ontario," Working Papers DTE 493, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte493
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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE493.pdf
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    More about this item

    Keywords

    Electricity; two-part tariff; financial transmission;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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