A method based on Empirical Martingale Simulation (EMS) is presented to evaluate investments in wind energy. Risk-neutral prices are calculated, where electricity market prices are modeled using an ARIMA–GARCH method which shows conditional heteroskedasticity. The values of the put options are...

Like in the film Field of Dreams, the sentence “if you build it, he will come” also applies in power systems. In this sense, if a transmission planner suggests building some lines in anticipation of generation capacity investments, then it can induce generation companies to invest in a more...

Providing the right incentives for investment continues to be a major source of concern in the New Zealand electricity sector. This seminar outlines a decentralised incentive mechanism designed to encourage transmission investment within a competitive market environment based on a system that...

We present an incentive scheme to stimulate investment in the improvement/ expansion of the transmission network in the competitive market environment. The formulation of these incentives is based on a decentralized transmission asset investment model and is derived from the value added to the...