Coordination and uncertainty in strategic network investment: case on the north seas grid
Author
dc.contributor.author
Konstantelos, Ioannis
Author
dc.contributor.author
Moreno Vieyra, Rodrigo
Author
dc.contributor.author
Strbac, Goran
Admission date
dc.date.accessioned
2018-05-25T15:02:45Z
Available date
dc.date.available
2018-05-25T15:02:45Z
Publication date
dc.date.issued
2017
Cita de ítem
dc.identifier.citation
Energy Economics 64 (2017) 131–148
es_ES
Identifier
dc.identifier.other
10.1016/j.eneco.2017.03.022
Identifier
dc.identifier.uri
https://repositorio.uchile.cl/handle/2250/148133
Abstract
dc.description.abstract
The notion of developing a transnational offshore grid in the North Sea has attracted considerable attention in the past years due to its potential for substantial capital savings and increased scope for cross-border trade, sparking a European-wide policy debate on incentivizing integrated transmission solutions. However, one important aspect that has so far received limited attention is that benefits will largely depend on the eventual deployment pattern of electricity infrastructure which is currently characterized by severe locational, sizing and timing uncertainty. Given the lack of coordination between generation and network developments across Europe, there is a real risk for over-investment or a premature lock-in to options that exhibit limited adaptability. In the near future, important choices that have to be made concerning the network topology and amount of investment. In this paper we identify the optimal, in terms of reduced cost, network investment (including topology) in the North Seas countries under four deployment scenarios and five distinct policy choices differing in the level of offshore coordination and international market integration. By drawing comparisons between the study results, we quantify the net benefit of enabling different types of coordination under each scenario. Furthermore, we showcase a novel min-max regret optimization model and identify minimum regret first-stage commitments which could be deployed in the near future in order to enhance strategic optionality, increase adaptability to different future conditions and hence reduce any potential sub-optimality of the initial network design. In view of the above, we put forward specific policy recommendations regarding the adoption of a flexible anticipatory expansion framework for the identification of attractive investment opportunities under uncertainty. (C) 2017 Elsevier B.V. All rights reserved.