TY - GEN
T1 - Formulation of incentives for decentralized transmission asset investments
AU - Contreras, Javier
AU - Gross, George
PY - 2009
Y1 - 2009
N2 - 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.
AB - 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.
KW - Cooperative game theory
KW - Investment incentives
KW - Shapley value
KW - Social welfare
KW - Transmission planning
UR - http://www.scopus.com/inward/record.url?scp=71849104631&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=71849104631&partnerID=8YFLogxK
U2 - 10.1109/PES.2009.5275608
DO - 10.1109/PES.2009.5275608
M3 - Conference contribution
AN - SCOPUS:71849104631
SN - 9781424442416
T3 - 2009 IEEE Power and Energy Society General Meeting, PES '09
BT - 2009 IEEE Power and Energy Society General Meeting, PES '09
T2 - 2009 IEEE Power and Energy Society General Meeting, PES '09
Y2 - 26 July 2009 through 30 July 2009
ER -