Renewable Energy and Transmission Networks - Green Energy and Efficiency: An Economic Perspective - page 377

3.2 Allocation of Transmission Capacity in the Different
Timeframes

Transmission capacity needs to be allocated over different timeframes. As already
argued, renewable, and, to some extent, conventional generators may need to get
access to the grid already in the long and medium term, especially those that are
located in areas that are weakly connected to main load centers. At the same time, in
the short term physical access to the grid must be managed either separately from
the energy dispatched or in an integrated fashion.
In the long-to-medium term, the total amount of transmission capacity to be
made available for the rst time in each auction should be conditioned by the

demand of this capacity. Otherwise, if agents are not able to ef

ciently arbitrage
capacity prices in auctions in different time frames, differences that are not fully
justi ed in the price paid for transmission capacity among different timeframes may

occur, which would decrease the ef ciency of the allocation of transmission

capacity. See [ 20 ] for a discussion of the distribution of available transmission
capacity among the different timeframes. In a context with a very high penetration
of RES-based generation, the appetite of RES and other generators for transmission
capacity in the long term may probably increase in order to shield their commercial
position. This should certainly condition the distribution though time of the issu-
ance of available transmission capacity.
In the very long term, transmission contracts should be already allocated to
agents within the transmission expansion problem. Obviously, the total amount of
existing transmission capacity plus the possibility to build new one should be
considered in this timeframe. The demand for these types of contracts, together with
the expectations of the development of generation and demand, should condition
the amount of new transmission capacity to be built. Then, in the medium-to-short
term, transmission capacity should be allocated in line with the level of prices in
each auction, with probably a larger amount of transmission capacity sold further
ahead of real time for agents to match their long-term energy positions.
In the very short term, given the large uncertainty faced by most generation
(which is expected to be RES-based) about their available production capacity, the
energy dispatch should be shifted as close to real time as it is feasible, so that
imbalances faced by these generators are as small as possible. If the energy dispatch
is delayed and moved closer to real time, the same should be done for the short-term
auction of physical transmission capacity. The larger the lapse of time between the
allocation of the use of transmission capacity and the energy auction, the larger the
differences between conditions applying in both auctions may be, which results in a
decrease in the ef ciency of the whole process. Several investigations have con-

cluded that, if possible, energy and transmission capacity should be auctioned
jointly in the very short term, see [ 11 ].