Generation adequacy and transmission interconnection in regional electricity markets

M. Cepeda, M. Saguan, D. Finon and V. Pignon
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M. Cepeda: EDF R&D - EDF R&D - EDF - EDF
M. Saguan: University of Paris XI-GRJM Group, 27 Avenue Lombart, 92260 Fontenay-aux-Roses - affiliation inconnue
D. Finon: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique
V. Pignon: EDF R&D - EDF R&D - EDF - EDF

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Abstract: The power system capacity adequacy has public good features that cannot be entirely solved by electricity markets. Regulatory intervention is then necessary and established methods have been used to assess adequacy and help regulators to fix this market failure. In regional electricity markets, transmission interconnections play an important role in contributing to adequacy. However, the adequacy problem and related policy are typically considered at a national level. This paper presents a simple model to study how the interconnection capacity interacts with generation adequacy. First results indicate that increasing interconnection capacity between systems improves adequacy up to a certain level; further increases do not procure additional adequacy improvements. Furthermore, besides adequacy improvement, increasing transmission capacity under asymmetric adequacy criteria or national system characteristics could create several concerns about externalities. These results imply that regional coordination of national adequacy policies is essential to internalise adequacy of cross-border effects. © 2009.

Date: 2009
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Citations: View citations in EconPapers (10)

Published in Energy Policy, 2009, 37 (12), pp.5612-5622. ⟨10.1016/j.enpol.2009.08.060⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00716344

DOI: 10.1016/j.enpol.2009.08.060

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