Search

Begin New Search
Proceed to Checkout

Search Results for All:
(Showing results 1 to 3 of 3)



Determining Optimal Interconnection Capacity on the Basis of Hourly Demand And Supply Functions of Electricity

Jan Horst Keppler and William Meunier

Year: 2018
Volume: Volume 39
Number: Number 3
DOI: 10.5547/01956574.39.3.jkep
View Abstract

Abstract:
Interconnections for cross-border electricity trade improve price convergence and welfare. Increased production from variable renewables however implies higher levels of optimal interconnection capacity than in the past. Rather than using scenario building to determine new optimal levels of interconnection capacity, this paper presents a new methodology for Cost-Benefit Analysis (CBA) based on empirical market data, using the French-German electricity trade as an example. Employing a very fine dataset of hourly supply and demand curves (aggregated auction curves) from the EPEX Spot market, it constructs net export (NEC) and net import demand curves (NIDC) for both countries. This allows assessing hourly welfare impacts for incremental capacity and, summed over the year, the annual welfare benefits for each discrete increase in interconnection capacity. Confronting benefits with the annualised costs of increasing interconnection capacity determines the socially optimal increase in interconnection capacity between France and Germany on the basis of empirical market micro-data.



Evaluating an Interconnection Project: Do Strategic Interactions Matter?

Sébastien Debia, David Benatia, and Pierre-Olivier Pineau

Year: 2018
Volume: Volume 39
Number: Number 6
DOI: 10.5547/01956574.39.6.sdeb
View Abstract

Abstract:
High-Voltage Direct Current (HVDC) merchant transmission lines allow trade across separate power markets and often in different countries. Flows on existing cross-border lines are often assessed as suboptimal, which may be due to the light regulation that often prevails in these cases. This paper studies the impact of market power on HVDC interconnections as a determinant of imperfect arbitrage. We assess the impact of Physical Transmission Rights (PTRs) allocation on the management of an HVDC interconnection between a thermal and a hydroelectricity market, assuming dynamic water management. We use a two-stage game formulated as an Equilibrium Problem with Equilibrium Constraints (EPEC) to model the strategic trade between the New York (US) and Quebec (Canada) systems. The numerical model is calibrated with public data. We find that although the interconnection can create wealth, a high concentration of PTRs can destroy value because of dumping strategies. The impact of trade on local price levels may be of concern and calls for the functional unbundling of traders and generators.



Common Unobserved Determinants of Intraday Electricity Prices

Nikolaos S. Thomaidis, Gordon H. Dash, and Nina Kajiji

Year: 2019
Volume: Volume 40
Number: The New Era of Energy Transition
DOI: 10.5547/01956574.40.SI1.ntho
View Abstract

Abstract:
This paper employs multilevel factor modelling techniques to unravel systematicunobserved determinants of the intraday and interzonal price curve dynamics forthe Pennsylvania-New Jersey-Maryland (PJM) interconnection. These techniquesmake an explicit separation of global drivers from region-specific common factors, thereby facilitating the identification of the actual sources of co-variability.Our empirical findings confirm the hypothesis that the common unobserved determinants of power prices in the PJM interconnection obey a block structure, someof which affect different segments of our panel. We argue that a multilevel factorapproach offers a more systematic and transparent representation of intertemporal and cross-sectional patterns in PJM electricity prices compared to alternativebrute-force VARMAX parametrizations and the single-level factor models, whichare often put forward in the literature as viable modelling alternatives.





Begin New Search
Proceed to Checkout

 

© 2021 International Association for Energy Economics | Privacy Policy | Return Policy