Capacity expansion in transmission networks using portfolios of real options. (January 2015)

• Record Type: Journal Article
• Authors: Loureiro, Manuel V.; Claro, João; Pereira, Paulo J.
• Is Part Of: International journal of electrical power & energy systems. Volume 64(2015:Jan.)
• Page Start: 439
• Page End: 446
• Publication Date: 2015-01
• Subjects: Transmission network planning -- Portfolios of real options -- Capacity expansion; Electrical engineering -- Periodicals; Electric power systems -- Periodicals; Électrotechnique -- Périodiques; Réseaux électriques (Énergie) -- Périodiques; Electric power systems; Electrical engineering; Periodicals; 621.3
• DOI: 10.1016/j.ijepes.2014.07.047
• Languages: English
• ISSNs: 0142-0615

Abstract

Highlights: Stochastic mixed integer linear model for multistage transmission network planning. Numerical study of independent, radial and meshed network building blocks. Postponement exclusion stresses value of operational flexibility in shared corridors. Operational and postponement flexibility are to a certain point substitutes. Operational flexibility can bring additional benefits on top of postponement flexibility. Abstract: We adopt in this paper a perspective of portfolios of real options, to propose a mixed integer linear programming model for multistage Transmission Network Expansion Planning. The model is then used to analyze three fundamental network building blocks – an independent design, a radial design, and a meshed design – seeking to develop network design insights, in particular regarding the joint value of postponement and other sources of operational flexibility. The results clearly point to the importance of explicitly incorporating uncertainty, adopting a multistage perspective, and addressing complex interactions between different sources of flexibility, in the design of transmission networks.