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El modelo HRV para expansión óptima de redes de transmisión: una aplicación a la red eléctrica de Ontario
[The HRV Model for the Optimal Expansion of Transmission Networks: an Application to the Ontario Electricity Grid]

Author

Listed:
  • Rosellon, Juan
  • Tregear, Juan
  • Zenon, Eric

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

  • Rosellon, Juan & Tregear, Juan & Zenon, Eric, 2010. "El modelo HRV para expansión óptima de redes de transmisión: una aplicación a la red eléctrica de Ontario [The HRV Model for the Optimal Expansion of Transmission Networks: an Application to the On," MPRA Paper 26471, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26471
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    File URL: https://mpra.ub.uni-muenchen.de/26471/1/MPRA_paper_26471.pdf
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    References listed on IDEAS

    as
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    6. Anna Creti & Natalia Fabra, 2003. "Capacity Markets for Electricity," Industrial Organization 0309002, University Library of Munich, Germany, revised 26 Nov 2003.
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    Cited by:

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    More about this item

    Keywords

    Keywords: Electricity transmission; financial transmission rights (FTRs); incentive regulation; loop-flow problem; nodal prices; Ontario;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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