TY - GEN
T1 - Revenue adequacy constrained optimal transmission switching
AU - Hedman, Kory
AU - Oren, Shmuel S.
AU - O'Neill, Richard P.
N1 - Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.
PY - 2011
Y1 - 2011
N2 - Financial Transmission Rights (FTRs) are used to hedge congestion risk and they are financed by congestion rents. The ISO may not collect enough congestion rents to cover its obligation to the FTR holders; this is known as revenue inadequacy. Revenue inadequacy may occur even though ISOs run a Simultaneous Feasibility Test (SFT), which ensures revenue adequacy. However, the SFT relies on the assumption that the grid topology is not modified. Recent research suggests that we should co-optimize generation with the network topology. There is the concern that optimizing the topology will cause revenue inadequacy. In this paper, we examine how transmission switching affects revenue adequacy of FTRs. We discuss how the optimal transmission switching problem can be modified in order to maximize the market surplus subject to maintaining revenue adequacy, if that is the desired motivation of the ISO. We also discuss the policy implications of adopting such a method.
AB - Financial Transmission Rights (FTRs) are used to hedge congestion risk and they are financed by congestion rents. The ISO may not collect enough congestion rents to cover its obligation to the FTR holders; this is known as revenue inadequacy. Revenue inadequacy may occur even though ISOs run a Simultaneous Feasibility Test (SFT), which ensures revenue adequacy. However, the SFT relies on the assumption that the grid topology is not modified. Recent research suggests that we should co-optimize generation with the network topology. There is the concern that optimizing the topology will cause revenue inadequacy. In this paper, we examine how transmission switching affects revenue adequacy of FTRs. We discuss how the optimal transmission switching problem can be modified in order to maximize the market surplus subject to maintaining revenue adequacy, if that is the desired motivation of the ISO. We also discuss the policy implications of adopting such a method.
UR - http://www.scopus.com/inward/record.url?scp=79952972819&partnerID=8YFLogxK
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U2 - 10.1109/HICSS.2011.361
DO - 10.1109/HICSS.2011.361
M3 - Conference contribution
AN - SCOPUS:79952972819
SN - 9780769542829
T3 - Proceedings of the Annual Hawaii International Conference on System Sciences
BT - Proceedings of the 44th Annual Hawaii International Conference on System Sciences, HICSS-44 2010
T2 - 44th Hawaii International Conference on System Sciences, HICSS-44 2010
Y2 - 4 January 2011 through 7 January 2011
ER -