Optimal transmission planning under the Mexican new electricity market

Eric Zenón and Juan Rosellon

Energy Policy, 2017, vol. 104, issue C, 349-360

Abstract: This paper addresses electricity transmission planning under the new industry and institutional structure of the Mexican electricity market, which has engaged in a deep reform process after decades of a state-owned-vertically-integrated-non-competitive-closed industry. Under this new structure, characterized by a nodal pricing system and an independent system operator (ISO), we analyze welfare-optimal network expansion with two modeling strategies. In a first model, we propose the use of an incentive price-cap mechanism to promote the expansion of Mexican networks. In a second model, we study centrally-planned grid expansion in Mexico by an ISO within a power-flow model. We carry out comparisons of these models which provide us with hints to evaluate the actual transmission planning process proposed by Mexican authorities (PRODESEN). We obtain that the PRODESEN plan appears to be a convergent welfare-optimal planning process.

Keywords: L50; L94; Q40; Electricity market reform; Vertical and horizontal disintegration; Transmission planning; Nodal prices; Mexico (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Working Paper: Optimal Transmission Planning under the Mexican New Electricity Market (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:104:y:2017:i:c:p:349-360

DOI: 10.1016/j.enpol.2017.02.006

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