Renewable Energy and Transmission Networks - Green Energy and Efficiency: An Economic Perspective - page 384

costs incurred in the long term, not to affect operation decisions by agents, which
are short term. However, applying the cost allocation principles outlined in

Sects. 4.1 4.4 is also deemed necessary.

-

5 Conclusions

Integrating large amounts of RES generation capacity is needed to achieve long-
term environmental policy objectives. Due to the speci c features of this type of

generation, namely the variability and unpredictability of its output, and the uneven
distribution of primary RES over a region, the regulation of the transmission

activity will have to be adapted accordingly.
Changes required concern the main aspects of the functioning of the transmis-
sion activity. The expansion of the grid will need to be centrally planned and
managed so as to consider bene ts exceeding the borders of each system or country.

At the same time, new transmission products, long-term contacts, will be needed to
create attractive enough investment conditions for RES and conventional generation
promoters. Network expansion planning algorithms will need to be improved to be
able to consider larger regional systems and a larger multiplicity of operation
situations.
The allocation of any scarce transmission capacity will have to take into account
the need to facilitate transmission contracts in the long term to the generators. The
distribution of the total amount of transmission capacity to be auctioned in the
different timeframes will have to be reconsidered. A large fraction of capacity
should be allocated in the long term in the form of contracts. Short-term trans-
mission capacity allocation would occur, probably jointly with the energy dispatch,
just before real time, so that the considered output pro

le of RES generation is as
close as possible to the actual one. The regulation of connection to the grid shall
also be conditioned by the concession of the already mentioned long-term trans-
mission contracts.
Lastly, the allocation of the costs of the transmission network shall be based on
cost allocation principles that have already been widely discussed. However, the
existence of RES generation, and the accompanying large power ows covering

large distances, will make the application of these principles absolutely necessary in
order not to jeopardize RES generation deployment. Thus, the allocation of the cost
of large new network infrastructures of a regional nature should be based on the
application of the bene

ciary-pays principle; charges paid by network users should
be computed once for large periods of time and should not depend on commercial
transactions; transmission charges should be structured as xed payments, not

allocated as per energy or per capacity; and transmission charges applied in a region
should be harmonized so that differences among charges do not hamper competition
among regional generation operators.