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Power System Transformation toward Renewables: An Evaluation of Regulatory Approaches for Network Expansion

Jonas Egerer, Juan Rosellón, and Wolf-Peter Schill

Year: 2015
Volume: Volume 36
Number: Number 4
DOI: 10.5547/01956574.36.4.jege
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Abstract:
We analyze various regulatory regimes for electricity transmission investment in the context of a power system transformation toward renewable energy. Distinctive developments of the generation mix are studied, assuming that a shift toward renewables may have temporary or permanent impacts on network congestion. We specifically analyze the relative performance of a combined merchant-regulatory price-cap mechanism, a cost-based rule, and a non-regulated approach in dynamic generation settings. We find that incentive regulation may perform better than cost-based regulation but only when appropriate weights are used. While quasi-ideal weights generally restore the beneficial properties that incentive regulatory mechanisms are well-known for, pure Laspeyres weights may either lead to over-investment or delayed investments as compared to the welfare-optimum benchmark. Laspeyres-Paasche weights, in turn, seem appropriate under permanently or temporarily increased network congestion. Thus, our analysis provides motivation for further research in order to characterize optimal regulation for transmission expansion in the context of renewable integration.



European Electricity Grid Infrastructure Expansion in a 2050 Context

Jonas Egerer, Clemens Gerbaulet, and Casimir Lorenz

Year: 2016
Volume: Volume 37
Number: Sustainable Infrastructure Development and Cross-Border Coordination
DOI: https://doi.org/10.5547/01956574.37.SI3.jege
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Abstract:
This paper analyzes the development of the European electricity transmission network for different policy scenarios at the horizon 2050. We apply a bottom-up techno-economic electricity sector model to determine transformation scenarios of the European electricity sector. It has a very detailed spatial disaggregation that allows for a fine representation of domestic and international electricity flows and transmission expansion. The cost-minimizing mixed-integer model calculates investments for time steps of ten years. The model results indicate that network requirements are lower than generally assumed. The largest share are domestic upgrades, rather than country interconnectors. Most investments (20bn EUR) occur in the near future, by 2030 the latest. Only the high-mitigation scenarios require large additional network investments. The timing and location of investments differ, depending on generation scenarios and cost assumptions for inter-connectors. The results indicate that carbon emission reduction targets alone provide insufficient information for long-term network planning.





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