A scheme for incentivizing investments and cost sharing in transmission enhancements

Javier Contreras, George Gross, Isabel Ruiz-Gómez, José M. Arroyo

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

We present an incentive scheme to stimulate investment in the improvement/expansion of the transmission network in the competitive market environment. The formulation of these incentives is based on a decentralized transmission asset investment model and is derived from the value added to the social welfare by an asset investment. In the formulation, we view each potential investor as a player in a cooperative game and we use the unique solution provided by the Shapley value to allocate the payment to each successful investor commensurated with the increase in social welfare the investment brings to the system. The formulation brings valuable insights on the transmission investment topic. We apply the proposed methodology to the Garver 6-bus system to illustrate the capabilites and flexibility of the scheme and to gain insights into the development of network improvements through the formulation proposed.

Original languageEnglish (US)
Title of host publication16th Power Systems Computation Conference, PSCC 2008
PublisherPower Systems Computation Conference ( PSCC )
ISBN (Electronic)9780947649289
StatePublished - Jan 1 2008
Event16th Power Systems Computation Conference, PSCC 2008 - Glasgow, United Kingdom
Duration: Jul 14 2008Jul 18 2008

Publication series

Name16th Power Systems Computation Conference, PSCC 2008

Other

Other16th Power Systems Computation Conference, PSCC 2008
CountryUnited Kingdom
CityGlasgow
Period7/14/087/18/08

Keywords

  • Cooperative game theory
  • Investment incentives
  • Shapley value
  • Social welfare
  • Transmission planning

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Computer Science Applications
  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering

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  • Cite this

    Contreras, J., Gross, G., Ruiz-Gómez, I., & Arroyo, J. M. (2008). A scheme for incentivizing investments and cost sharing in transmission enhancements. In 16th Power Systems Computation Conference, PSCC 2008 (16th Power Systems Computation Conference, PSCC 2008). Power Systems Computation Conference ( PSCC ).