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The use of residential Photovoltaic-Storage systems may produce large benefits to owners and has expanded rapidly in recent years. Nonetheless, large uncertainties regarding the profitability of these systems make it necessary to incorporate flexibilities in their economic evaluations. This paper offers a new method to evaluate the compound flexibility of both the option of delaying investments and the option of further expanding the capacity of solar photovoltaic modules and batteries during the investment horizon. Flexibility is modeled as a compound real option, whose value is computed using a novel method that we call Compound Least Squares Monte Carlo (CLSM). The model is applied to the investment decisions associated to a residential Photovoltaic-Storage system. Results suggest that investors should use the proposed CLSM method in the economic valuation of multi-stage projects, since considering only a single flexibility could promote sub-optimal decisions. Moreover, in our case study, we show that it is optimal to break the investment down into two steps or more in 36% of future scenarios, on average. Keywords: Batteries, Least Squares Monte Carlo, Optimal Investment Path, Real Options; RPV-Storage Systems, Solar Power, 1. INTRODUCTION Several countries are promoting renewable energy sources and discouraging fossil-fuel-based energy generation. On the one hand, these initiatives have resulted in a large integration of non-dispatchable energy sources, [...]

In this paper, we investigate the combined effect of carbon policies and price controls in cross-border trade of electricity on power generation investments. It has been shown that price controls in cross-border trade of electricity may negatively affect renewable energy investments. However, the assessment of the impact of the simultaneous adoption of carbon policies and energy price controls has still not been addressed. Assessing this interaction is important to find out whether carbon policies can offset the negative impact of price controls on renewable energy investments or not. Results show that carbon policies can partially offset the negative impact of price controls, and that cap-and-trade programs are more effective to prevent this negative impact than carbon taxes. On the other hand, high levels of carbon taxes combined with price control regulation may increase renewable capacity investments, but without completely offsetting the negative effect of the price controls. [ABSTRACT FROM AUTHOR]

In the new environmental era, electricity markets change rapidly, requiring dynamic strategic responses from market agents and regulators. In this paper, we study the intertemporal dimension of the network planner decision process. In particular, we formulate a dynamic model of transmission investments and use this model to compare the behavior of a network planner when considering and when ignoring the dynamic nature of transmission investments. This paper's analysis focuses on the situation faced by some hubs with growing demand which meet their demand with power generated by distant sources subject to uncertainty. This is the case of a large city, which demand is satisfied by hydro or wind power supplied from sources located far away. For this kind of systems (typified as a simple two-node network that satisfies certain properties), we characterize the structure of a socially efficient transmission investment policy. It is shown that, in such a network, an optimal open-loop transmission investment policy has a multiperiod (s, S) structure. The results are illustrated with a numerical example. CE Database subject headings: Energy; Electrical systems; Electric transmission; Facility expansion; Investments; Computer programming.

From an economic perspective, a common criterion for assessing the merits of a transmission investment is its impacts on social welfare. The underlying assumption in using this criterion is that side payments may be used to distribute the social gains among all market players. In reality, however, since the impacts of an electricity transmission project on different players may vary, such side payments are rather difficult to implement. This paper focuses on different economic criteria that should be considered when planning electricity transmission investments. We propose an electricity transmission investment assessment methodology that is capable of evaluating the economic impacts on the various effected stakeholders and account for strategic responses that could enhance or impede the investment's objectives. We formulate transmission planning as an optimization problem under alternative conflicting objectives and investigate the policy implications of divergent expansion plans resulting from the planner's level of anticipation of strategic responses. We find that optimal transmission expansion plans may be very sensitive to supply and demand parameters. We also show that the transmission investments have significant distributional impact, creating acute conflicts of interests among market participants. We use a 32-bus representation of the main Chilean grid to illustrate our results. Index Terms--Market power, network expansion planning, power system economics, power transmission planning.