Modeling generation expansion in the context of a security of supply mechanism based on long-term auctions. Application to the Colombian case

In an attempt to provide electricity generation investors with appropriate economic incentives so as to maintain quality of supply at socially optimal levels, a growing number of electricity market regulators have opted for implementing a security of supply mechanism based on long-term auctions. In...

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Bibliographic Details
Published in:Energy policy 2011, Vol.39 (1), p.176-186
Main Authors: Rodilla, P, Batlle, C, Salazar, J, Sánchez, J.J
Format: Article
Language:English
Subjects:
Applied sciences
Auctions
Colombia
Computer simulation
Economic data
economic incentives
economic investment
Economic models
Economics
Electric energy
Electricity
Electricity generation
Electricity market modeling
Energy
Energy economics
Energy market
Energy policy
Exact sciences and technology
General, economic and professional studies
Investment
Long-term auctions
market regulations
Markets
Mathematical models
Methodology. Modelling
Modelling
Power supply
Regulation
Regulators
Security
Security of supply
Security of supply Long-term auctions Electricity market modeling
Simulation
Studies
Supply
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Summary:In an attempt to provide electricity generation investors with appropriate economic incentives so as to maintain quality of supply at socially optimal levels, a growing number of electricity market regulators have opted for implementing a security of supply mechanism based on long-term auctions. In this context, the ability to analyze long-term investment dynamics is a key issue not only for market agents, but also for regulators. This paper describes a model developed to serve this purpose. A general system-dynamics-inspired methodology has been designed to be able to simulate these long-term auction mechanisms in the formats presently in place. A full-scale simulation based on the Colombian system was conducted to illustrate model capabilities.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2010.09.027