Formulation of incentives for decentralized transmission asset investments

Javier Contreras, George Gross

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

Abstract

This paper presents an incentive scheme to encourage private investment in the improvement and expansion of the transmission in the competitive electricity market environment. Without incentives, the necessary enhancements to the existing grid would not go forward. To create these incentives, we propose a decentralized transmission asset investment model, where the new assets are built by private investors. The incentives are based on value added to the social welfare through each asset investment. By viewing each potential investor as a player in a cooperative game we use the Shapley value on a unique equitable basis to reward investors according to the added value that they create. We apply our methodology to the Garver 6-bus system and the IEEE 24-bus RTS to illustrate the capability and flexibility of the decision support system that we propose.

Original languageEnglish (US)
Title of host publication2009 IEEE Power and Energy Society General Meeting, PES '09
DOIs
StatePublished - Dec 17 2009
Event2009 IEEE Power and Energy Society General Meeting, PES '09 - Calgary, AB, Canada
Duration: Jul 26 2009Jul 30 2009

Publication series

Name2009 IEEE Power and Energy Society General Meeting, PES '09

Other

Other2009 IEEE Power and Energy Society General Meeting, PES '09
Country/TerritoryCanada
CityCalgary, AB
Period7/26/097/30/09

Keywords

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

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Electrical and Electronic Engineering

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