Environmental Engineering Reference
In-Depth Information
to connect to the grid, some of which will not materialize, and to make compatible
priority connection for some generators with the ef
cient development of the sys-
tem will have to be put in place.
3.1 Long-Term Transmission Capacity Allocation Process;
Format of Long-Term Rights
De
ning long-term transmission contracts and the process of allocation of trans-
mission capacity will involve specifying the format of auctions and that of products
exchanged. As already mentioned, long term transmission capacity products could
be combined with energy long-term contracts at the point of delivery to de
ne
energy contracts at the point of connection of new generation. This would involve
merging long-term generation and transmission capacity auctions, which would
involve, for a start, leaving both processes in the hands of the same entity. Alter-
natively, transmission contracts can be sold separately from energy ones. But in this
case, there is a risk that the allocation is inef
cient in the sense that new generators
may buy different amounts of transmission and energy contracts, which would
provide them with under or over protection of their energy supply from the risk
associated with the volatility in the value of transmission capacity.
If transmission products over still-to-be-built capacity are de
ned and assigned
in the long term, then the central auctioneer should make sure that there is enough
transmission capacity for the most ef
cient power injections and withdrawals while,
at the same time, checking that the transmission rights that are issued can be
guaranteed (or that there will be enough funds to pay back congestion rents cor-
responding to these transmission rights). This revenue adequacy criterion should
hold when considering jointly the transmission grid that exists and the new one. In
other words, power transactions backed by those long-term transmission contracts
that are issued should be simultaneously feasible with power injections and with-
drawals that, despite not being backed by long-term transmission contracts, would
allow the system to achieve energy policy objectives (safe supply of expected load
that is sustainable in time from a socio-environmental point of view) at the lowest
possible cost. The speci
c formulation of the long-term capacity allocation prob-
lem, namely that of the objective function to consider and the whole set of con-
straints to enforce, is still to be de
ned.
In the medium term, transmission contracts should still be sold to agents, though
these contracts should refer to already existing capacity, since there would not be
enough time for new transmission capacity to be built before delivery time (real
time). Assuming transmission contracts sold do not interfere with the ef
cient use to
be made of the grid in real time, given that no new transmission capacity is to be
built as a result of medium-term auctions, one shall conclude that these auctions
should not impact the short-term energy dispatch. Hence, the optimal energy dis-
patch would not need to be computed at
the same time that medium-term
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