Abstract We study the value of adding flexibility to Transmission Expansion Planning (TEP) projects from the perspective of a social planner using real options. Due to the deregulation of electricity markets, TEP projects currently face multiple uncertainties. These uncertainties often cause traditional project valuation methods to recommend sub-optimal investment decisions. Additionally, to incorporate the effects of uncertainties on the valuation of TEP projects, current literature rely on some critical simplifications that do not fit well with the real operations of a power market. This paper models the power market in a realistic way by combining an equilibrium model, to assess the power market equilibrium that the TEP project will generate, with a valuation model based on real options, to incorporate the value of flexibility. The methodology is applied to determine the value of adding capacity expansion flexibility to a portion of the rigid TEP project that connects the main two interconnected systems in Chile since 2018. Our results show that, in this case, adding flexibility increases the net expected social welfare by $14.03 million. Several sensitivity analyses confirm that this flexibility has more value when uncertainty is higher and/or investment costs are lower.

中文翻译：

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从社会规划者的角度评估输电扩展规划的灵活性：智利电力系统的方法和应用

摘要 我们从使用实物期权的社会规划者的角度研究了为输电扩展规划 (TEP) 项目增加灵活性的价值。由于电力市场放松管制，TEP项目目前面临多重不确定性。这些不确定性往往会导致传统的项目估值方法推荐次优的投资决策。此外，为了纳入不确定性对 TEP 项目估值的影响，目前的文献依赖于一些与电力市场实际运行不符的关键简化。本文通过结合均衡模型以现实的方式对电力市场进行建模，以评估 TEP 项目将产生的电力市场均衡，以及基于实物期权的估值模型，以纳入灵活性的价值。该方法用于确定自 2018 年以来连接智利主要两个互连系统的刚性 TEP 项目的一部分增加容量扩展灵活性的价值。 我们的结果表明，在这种情况下，增加灵活性会增加净预期社会福利1403 万美元。多项敏感性分析证实，当不确定性较高和/或投资成本较低时，这种灵活性更有价值。