Anticipation for efficient electricity transmission network investments

Abstract

This paper proposes a model and preliminary results to evaluate the efficiency of anticipating the connection of power plants with shorter construction duration than the time needed to obtain the right to upgrade the network and finally to do this reinforcement. This evaluation is made in presence of a cost of anticipation related to the study of the project of network investment and to the administrative procedures needed to obtain the building agreement. This model compares a proactive TSO that anticipates the connection of new generators and then the required network reinforcement, with a reactive one that does not make any anticipation but that may then face greater congestion while the network is being reinforced. The efficiency of these behaviors is measured in terms of social cost. We find out that there exists a limit of probability for the connection of generators beyond which a proactive TSO is more efficient than a reactive one. Evaluated on a realistic case of connection, this limit of probability is found quite low, which indicates that the proactive behavior for a TSO shall generally be the optimal one.