A real options based method for power system planning

Lu, Zhe, Lu, Miao, Dong, Zhao Yang and Ngan, H. W. (2006). A real options based method for power system planning. In: C.M. Mak and K.P. Wong, Proceedings of the 7th International Conference on Advances in Power System Control, Operation and Management. 7th International Conference on Advances in Power System Control, Operation and Management, Hong Kong, (). 30 October - 2 November, 2006.


Author Lu, Zhe
Lu, Miao
Dong, Zhao Yang
Ngan, H. W.
Title of paper A real options based method for power system planning
Conference name 7th International Conference on Advances in Power System Control, Operation and Management
Conference location Hong Kong
Conference dates 30 October - 2 November, 2006
Proceedings title Proceedings of the 7th International Conference on Advances in Power System Control, Operation and Management
Place of Publication Hong Kong
Publisher The Institution of Engineering and Technology Hong Kong
Publication Year 2006
Sub-type Fully published paper
DOI 10.1049/cp:20062163
ISBN 0863412467
9780863412462
Editor C.M. Mak
K.P. Wong
Volume 523 CP
Total pages 6
Collection year 2006
Language eng
Abstract/Summary 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.
Subjects E1
290901 Electrical Engineering
660301 Electricity transmission
Q-Index Code E1
Institutional Status UQ

 
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Created: Thu, 23 Aug 2007, 22:25:31 EST