Investments in Electricity Distribution Grids: Strategic versus Incremental Planning

Spyros Giannelos (), Tai Zhang, Danny Pudjianto, Ioannis Konstantelos and Goran Strbac
Additional contact information
Spyros Giannelos: Department of Electrical and Electronic Engineering, Imperial College London, London SW7 2AZ, UK
Tai Zhang: Department of Electrical and Electronic Engineering, Imperial College London, London SW7 2AZ, UK
Danny Pudjianto: Department of Electrical and Electronic Engineering, Imperial College London, London SW7 2AZ, UK
Ioannis Konstantelos: Department of Electrical and Electronic Engineering, Imperial College London, London SW7 2AZ, UK
Goran Strbac: Department of Electrical and Electronic Engineering, Imperial College London, London SW7 2AZ, UK

Energies, 2024, vol. 17, issue 11, 1-13

Abstract: The ongoing electrification of the transport sector is expected to cause an increase in electricity demand and, therefore, trigger significant network investments to accommodate it. This paper focuses on investment decision-making for electricity distribution grids and specifically on the strategic and incremental investment network planning approaches. In particular, the former involves network planning with the consideration of a long-term multi-stage study horizon, as opposed to a shorter–term view of the future that applies to the latter case. An investment analysis that is carried out underlines the economic savings generated from adopting a strategic investment perspective over an incremental one. These economic savings are achieved from the fact that the associated fixed investment costs are incurred only once in the horizon under strategic planning. On the other hand, incremental planning involves a series of network reinforcement decisions, thereby incurring the fixed cost multiple times. In addition, sensitivity analyses that are carried out capture the effect of key parameters, such as investment cost, discount rate and investment delay, on the generated economic savings.

Keywords: distribution network planning; electrification of transport; energy investments; incremental network planning; strategic network planning (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/1996-1073/17/11/2724/pdf (application/pdf)
https://www.mdpi.com/1996-1073/17/11/2724/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:17:y:2024:i:11:p:2724-:d:1408145

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().