TY - GEN
T1 - A real options based method for power system planning
AU - Lu, Zh
AU - Lu, Mia
AU - Dong, Zhaoyan
AU - Ngan, H. W.
N1 - Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].
PY - 2006
Y1 - 2006
N2 - A deregulated electricity market is characterized with uncertainties, with both long and short terms. As one of the major long term planning issues, the transmission expansion planning (TEP) is aiming at implementing reliable and secure network support to the market participants. The TEP covers two major issues: technical assessment and financial evaluations. Traditionally, the net present value (NPV) method is the most accepted for financial evaluations, it is simple to conduct and easy to understand. Nevertheless, TEP in a deregulated market needs a more dynamic approach to incorporate a project's management flexibility, or the managerial ability to adapt in response to unpredictable market developments. The real options approach (ROA) is introduced here, which has clear advantage on counting the future course of actions that investors may take, with understandable results in monetary terms. In the case study, a Nordic test system has been testified and several scenarios are given for network expansion planning. Both the technical assessment and financial evaluation have been conducted in the case study.
AB - A deregulated electricity market is characterized with uncertainties, with both long and short terms. As one of the major long term planning issues, the transmission expansion planning (TEP) is aiming at implementing reliable and secure network support to the market participants. The TEP covers two major issues: technical assessment and financial evaluations. Traditionally, the net present value (NPV) method is the most accepted for financial evaluations, it is simple to conduct and easy to understand. Nevertheless, TEP in a deregulated market needs a more dynamic approach to incorporate a project's management flexibility, or the managerial ability to adapt in response to unpredictable market developments. The real options approach (ROA) is introduced here, which has clear advantage on counting the future course of actions that investors may take, with understandable results in monetary terms. In the case study, a Nordic test system has been testified and several scenarios are given for network expansion planning. Both the technical assessment and financial evaluation have been conducted in the case study.
KW - Net Present Value (NPV) and Differential Evolution (DE)
KW - Real Options Approach (ROA)
KW - Transmission Expansion Planning (TEP)
UR - https://www.scopus.com/pages/publications/70350225318
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-70350225318&origin=recordpage
U2 - 10.1049/cp:20062163
DO - 10.1049/cp:20062163
M3 - RGC 32 - Refereed conference paper (with host publication)
SN - 0863412467
SN - 9780863412462
T3 - IET Conference Publications
BT - 7th IET International Conference on Advances in Power System Control, Operation and Management (APSCOM 2006)
T2 - 7th IET International Conference on Advances in Power System Control, Operation and Management, APSCOM 2006
Y2 - 30 October 2006 through 2 November 2006
ER -