Does Risk Aversion Affect Transmission and Generation Planning? A Western North America Case Study [electronic resource].

Published:: Washington, D.C. : United States. Office of Electricity Delivery & Energy Reliability, 2017.
Oak Ridge, Tenn. : Distributed by the Office of Scientific and Technical Information, U.S. Dept. of Energy
Physical Description:: pages 213-225 : digital, PDF file
Additional Creators:: Sandia National Laboratories, United States. Office of Electricity Delivery & Energy Reliability, and United States. Department of Energy. Office of Scientific and Technical Information

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Summary:

Here, we investigate the effects of risk aversion on optimal transmission and generation expansion planning in a competitive and complete market. To do so, we formulate a stochastic model that minimizes a weighted average of expected transmission and generation costs and their conditional value at risk (CVaR). We also show that the solution of this optimization problem is equivalent to the solution of a perfectly competitive risk-averse Stackelberg equilibrium, in which a risk-averse transmission planner maximizes welfare after which risk-averse generators maximize profits. Furthermore, this model is then applied to a 240-bus representation of the Western Electricity Coordinating Council, in which we examine the impact of risk aversion on levels and spatial patterns of generation and transmission investment. Although the impact of risk aversion remains small at an aggregate level, state-level impacts on generation and transmission investment can be significant, which emphasizes the importance of explicit consideration of risk aversion in planning models.

Report Numbers:

E 1.99:sand--2017-3855j
sand--2017-3855j

Subject(s):

Applied Life Sciences

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Note:

Published through SciTech Connect.
04/07/2017.
"sand--2017-3855j"
"652433"
Energy Economics 64 ISSN 0140-9883 AM
Francisco Munoz; Adriaan Hendrik van der Weijde; Benjamin F. Hobbs; Jean-Paul Watson.

Funding Information:

AC04-94AL85000

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