Designing regulatory frameworks for merchant transmission investments by real options analysis

Autores
Pringles, Rolando Marcelo; Olsina, Fernando Gabriel; Garces, Francisco Felipe
Año de publicación
2014
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
In deregulated electricity markets, the transmission network is a key infrastructure for enabling competition in the generation sector. A deficient expansion of the transmission grid prevents the realization of the benefits in terms of efficiency associated with market mechanisms. Consequently, it is essential to provide clear investment policies and economic signals to attract timely and efficient transmission in order to be developed at minimum cost, with adequate levels of service quality and reliability, and adapted to the requirements of generators and consumers. This paper proposes a modern tool of economic evaluation based on Real Options Analysis that provides the regulator the ability to assess various incentives that allow transmission investors to make efficient decisions in highly uncertain environments. Real Options properly values partially irreversible investment decisions, such as to defer, modify or abandon an investment project in response to the arrival of new information or as uncertainties are resolved. Decisions are evaluated from the point of view of an agent trying to maximize its own profits in the time period set to recover the capital invested. The results of this paper allow the study of the behavior of transmission investors regarding their decision making when they have the possibility to manage the option to defer, under different regulatory schemes that encourage the expansion of the transmission system
Fil: Pringles, Rolando Marcelo. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
Fil: Olsina, Fernando Gabriel. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
Fil: Garces, Francisco Felipe. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
Materia
Power Network
Planning
Regulation
Real Options
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-nd/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/5262
Acceder
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network_name_str CONICET Digital (CONICET)
spelling Designing regulatory frameworks for merchant transmission investments by real options analysisPringles, Rolando MarceloOlsina, Fernando GabrielGarces, Francisco FelipePower NetworkPlanningRegulationReal Optionshttps://purl.org/becyt/ford/2.2https://purl.org/becyt/ford/2In deregulated electricity markets, the transmission network is a key infrastructure for enabling competition in the generation sector. A deficient expansion of the transmission grid prevents the realization of the benefits in terms of efficiency associated with market mechanisms. Consequently, it is essential to provide clear investment policies and economic signals to attract timely and efficient transmission in order to be developed at minimum cost, with adequate levels of service quality and reliability, and adapted to the requirements of generators and consumers. This paper proposes a modern tool of economic evaluation based on Real Options Analysis that provides the regulator the ability to assess various incentives that allow transmission investors to make efficient decisions in highly uncertain environments. Real Options properly values partially irreversible investment decisions, such as to defer, modify or abandon an investment project in response to the arrival of new information or as uncertainties are resolved. Decisions are evaluated from the point of view of an agent trying to maximize its own profits in the time period set to recover the capital invested. The results of this paper allow the study of the behavior of transmission investors regarding their decision making when they have the possibility to manage the option to defer, under different regulatory schemes that encourage the expansion of the transmission systemFil: Pringles, Rolando Marcelo. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; ArgentinaFil: Olsina, Fernando Gabriel. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; ArgentinaFil: Garces, Francisco Felipe. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; ArgentinaElsevier2014-01-08info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfapplication/pdfapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/5262Pringles, Rolando Marcelo; Olsina, Fernando Gabriel; Garces, Francisco Felipe; Designing regulatory frameworks for merchant transmission investments by real options analysis; Elsevier; Energy Policy; 67; 8-1-2014; 272-2800301-4215enginfo:eu-repo/semantics/altIdentifier/url/http://www.sciencedirect.com/science/article/pii/S0301421513012780info:eu-repo/semantics/altIdentifier/doi/10.1016/j.enpol.2013.12.034info:eu-repo/semantics/altIdentifier/doi/info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-nd/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-12-23T14:36:50Zoai:ri.conicet.gov.ar:11336/5262instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-12-23 14:36:50.908CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Designing regulatory frameworks for merchant transmission investments by real options analysis
title Designing regulatory frameworks for merchant transmission investments by real options analysis
spellingShingle Designing regulatory frameworks for merchant transmission investments by real options analysis
Pringles, Rolando Marcelo
Power Network
Planning
Regulation
Real Options
title_short Designing regulatory frameworks for merchant transmission investments by real options analysis
title_full Designing regulatory frameworks for merchant transmission investments by real options analysis
title_fullStr Designing regulatory frameworks for merchant transmission investments by real options analysis
title_full_unstemmed Designing regulatory frameworks for merchant transmission investments by real options analysis
title_sort Designing regulatory frameworks for merchant transmission investments by real options analysis
dc.creator.none.fl_str_mv Pringles, Rolando Marcelo
Olsina, Fernando Gabriel
Garces, Francisco Felipe
author Pringles, Rolando Marcelo
author_facet Pringles, Rolando Marcelo
Olsina, Fernando Gabriel
Garces, Francisco Felipe
author_role author
author2 Olsina, Fernando Gabriel
Garces, Francisco Felipe
author2_role author
author
dc.subject.none.fl_str_mv Power Network
Planning
Regulation
Real Options
topic Power Network
Planning
Regulation
Real Options
purl_subject.fl_str_mv https://purl.org/becyt/ford/2.2
https://purl.org/becyt/ford/2
dc.description.none.fl_txt_mv In deregulated electricity markets, the transmission network is a key infrastructure for enabling competition in the generation sector. A deficient expansion of the transmission grid prevents the realization of the benefits in terms of efficiency associated with market mechanisms. Consequently, it is essential to provide clear investment policies and economic signals to attract timely and efficient transmission in order to be developed at minimum cost, with adequate levels of service quality and reliability, and adapted to the requirements of generators and consumers. This paper proposes a modern tool of economic evaluation based on Real Options Analysis that provides the regulator the ability to assess various incentives that allow transmission investors to make efficient decisions in highly uncertain environments. Real Options properly values partially irreversible investment decisions, such as to defer, modify or abandon an investment project in response to the arrival of new information or as uncertainties are resolved. Decisions are evaluated from the point of view of an agent trying to maximize its own profits in the time period set to recover the capital invested. The results of this paper allow the study of the behavior of transmission investors regarding their decision making when they have the possibility to manage the option to defer, under different regulatory schemes that encourage the expansion of the transmission system
Fil: Pringles, Rolando Marcelo. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
Fil: Olsina, Fernando Gabriel. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
Fil: Garces, Francisco Felipe. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico San Juan. Instituto de Energia Electrica; Argentina
description In deregulated electricity markets, the transmission network is a key infrastructure for enabling competition in the generation sector. A deficient expansion of the transmission grid prevents the realization of the benefits in terms of efficiency associated with market mechanisms. Consequently, it is essential to provide clear investment policies and economic signals to attract timely and efficient transmission in order to be developed at minimum cost, with adequate levels of service quality and reliability, and adapted to the requirements of generators and consumers. This paper proposes a modern tool of economic evaluation based on Real Options Analysis that provides the regulator the ability to assess various incentives that allow transmission investors to make efficient decisions in highly uncertain environments. Real Options properly values partially irreversible investment decisions, such as to defer, modify or abandon an investment project in response to the arrival of new information or as uncertainties are resolved. Decisions are evaluated from the point of view of an agent trying to maximize its own profits in the time period set to recover the capital invested. The results of this paper allow the study of the behavior of transmission investors regarding their decision making when they have the possibility to manage the option to defer, under different regulatory schemes that encourage the expansion of the transmission system
publishDate 2014
dc.date.none.fl_str_mv 2014-01-08
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/5262
Pringles, Rolando Marcelo; Olsina, Fernando Gabriel; Garces, Francisco Felipe; Designing regulatory frameworks for merchant transmission investments by real options analysis; Elsevier; Energy Policy; 67; 8-1-2014; 272-280
0301-4215
url http://hdl.handle.net/11336/5262
identifier_str_mv Pringles, Rolando Marcelo; Olsina, Fernando Gabriel; Garces, Francisco Felipe; Designing regulatory frameworks for merchant transmission investments by real options analysis; Elsevier; Energy Policy; 67; 8-1-2014; 272-280
0301-4215
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://www.sciencedirect.com/science/article/pii/S0301421513012780
info:eu-repo/semantics/altIdentifier/doi/10.1016/j.enpol.2013.12.034
info:eu-repo/semantics/altIdentifier/doi/
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-nd/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-nd/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
application/pdf
application/pdf
application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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score 12.441415

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