valuing expansions of the electricity transmission network under uncertainty the binodal case评估不确定情况下的输电网络扩展双节的情况.pdfVIP

Energies 2011, 4, 1696-1727; doi:10.3390/en4101696 OPEN ACCESS energies ISSN 1996-1073 /journal/energies Article Valuing Expansions of the Electricity Transmission Network under Uncertainty: The Binodal Case Luis M. Abadie 1 and José M. Chamorro 2,* 1 Basque Centre for Climate Change (BC3), Alameda Urquijo 4,4ª-1ª, 48008 Bilbao, Spain; E-Mail: lm.abadie@ 2 University of the Basque Country, Av. Lehendakari Aguirre 83, 48015 Bilbao, Spain * Author to whom correspondence should be addressed; E-Mail: jm.chamorro@ehu.es; Tel.: +34-946-013-769. Received: 1 August 2011; in revised form: 27 September 2011 / Accepted: 12 October 2011 / Published: 21 October 2011 Abstract: Transmission investments are currently needed to meet an increasing electricity demand, to address security of supply concerns, and to reach carbon-emissions targets. A key issue when assessing the benefits from an expanded grid concerns the valuation of the uncertain cash flows that result from the expansion. We propose a valuation model that accommodates both physical and economic uncertainties following the Real Options approach. It combines optimization techniques with Monte Carlo simulation. We illustrate the use of our model in a simplified, two-node grid and assess the decision whether to invest or not in a particular upgrade. The generation mix includes coal- and natural gas-fired stations that operate under carbon constraints.