Browsing by Author "Rudnick van de Wyngard, Hugh"

Now showing 1 - 20 of 38
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    A Framework for Transmission Expansion Planning: A Complex Problem Clouded by Uncertainty
    (IEEE, 2016) Velásquez Guerino, Constantin Sebastián Klaus; Watts Casimis, David; Rudnick van de Wyngard, Hugh; Bustos Sölch, Cristián Pablo
    Transmission Expansion Planning (TEP), a complex problem that is vital to ensure the proper functioning of restructured electricity markets, is clouded by uncertainties. Timely and cost-effective transmission expansion is necessary for providing secure and reliable electricity service to customers, enhancing competition, and ensuring market efficiency in electricity markets. Given the irreversibility and long lifetimes of transmission investments, TEP requires addressing uncertainties on future system conditions several years ahead. Because of these fundamental properties of transmission, the importance of developing tools and models to assist power system planning under uncertainty has long been recognized. As any decision under uncertainty is made before the uncertainty is revealed, addressing uncertainties allows hedging against risks caused by the outcomes of decisions taken under uncertainty.
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    A Principal-Agent Approach to Transmission Expansion-Part I: Regulatory Framework
    (IEEE, 2013) Molina Castro, Juan David; Contreras, J.; Rudnick van de Wyngard, Hugh
    Different regulatory frameworks have implemented competitive mechanisms to increase efficiency in transmission, a natural monopoly. Conflicts of interest and hidden costs make necessary to define methods to obtain an appropriate valuation of new transmission assets. This paper is the first one of a two-paper series and presents the fundamentals of transmission project valuation and cost allocation. We show the fundamentals of non-cooperative game theory, different concepts of game equilibria (Nash, Stackelberg, and Berge), and solutions to the bilateral negotiation problem (Nash bargaining solution, Kalai-Smorodinsky, and Rubinstein). In addition, the design of mechanisms, the information revelation principles, and incentive compatibility issues are described. We propose a model composed of three elements: valuation of a transmission project based on a linear contract, a principal-agent model to determine the optimal effort of an agent developing the transmission project, and the optimal bilateral negotiation of right-of-way costs. We define a method to evaluate the offers to build a transmission line project as a function of the number of agents bidding for it. The value of the project is a function of both the incentives and the valuation of the right-of-way costs. In part two of this series, we present two case studies: the IEEE 24-bus RTS and the Sistema Interconectado Central (SIC) in Chile, where we apply the methodology to a real network.
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    A Principal-Agent Approach to Transmission Expansion-Part II: Case Studies
    (IEEE, 2013) Molina Castro, Juan David; Contreras, J.; Rudnick van de Wyngard, Hugh
    This paper is the second of a two-paper series and presents a model to assess and promote investment projects defined in a plan of expansion of the transmission. We propose a model that consists of three main elements: valuation of a project based on the design of a linear contract, a principal-agent model to assess the optimal effort of an agent, and the right-of-way negotiating cost. We also define a model to evaluate bids by the agents. The value of the project depends on the number of competitors, the incentives to invest, and the right-of-way costs. The right-of-way cost is approached from the perspective of a bilateral bargaining problem.
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    Achieving a low carbon economy in a fast developing country
    (IEEE, 2011) Mocarquer Grout, Sebastian; Rudnick van de Wyngard, Hugh
    Most fast developing countries have set targets to achieve a developed status in the near future. Nonetheless, emerging economies from developing countries must struggle to balance the need for energy but coping with environmental sustainability principles, both local and globally. Chile has set a voluntary target of capping CO2 emissions by 20 % by the year 2020, with 2007 as reference. Heated discussion has risen in how to comply with such a goal and how should energy policy drive the needed actions. Mitigation of the effects of climate change has been mainly in the center of the discussion everywhere, however adaptation to climate change effects is probably the key element if the premise that the earth's temperature will continue to increase before mankind can effectively change current GHG trends. Challenges faced for developing countries to achieve a low carbon economy are reviewed taking as an example the case of Chile.
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    Auction mechanisms for long-term electricity contracts: Application to the Colombian market
    (IEEE, 2014) Caicedo Beltrán, Germán Alberto.; Rudnick van de Wyngard, Hugh; Sauma Santis, Enzo Enrique
    Electricity contracts are long-term supply assurance mechanism still in critical conditions, encourage competition and mitigate the risk of price volatility. However, it is necessary to evaluate design alternatives that balance contracts market versus expectations of the producers and the planner and/or regulator of the system. In this paper an international referencing is made, the formation of long-term price is analyzed, as well as market risks and their management. It implements a market simulation model, applying auction theory and descending clock auction. Contracting strategies are simulated, with product sensitivities, clearance mechanism, supply restriction and payment allocation, considering also the expectation of the buyer. For this, the demand function is estimated, the willingness to pay, and the maximum offer utility by sub-optimal allocations of opportunity cost and efficient frontier. Results show that the descending auction clears at more suitable prices against closed envelope auction and promotes competition under certain characteristics of the demand function. Best results are obtained with a standardized product, but in blocks of no more than 1% of the amount auctioned. A larger size creates infeasible solutions, increasing the closing price that contrasts when considering a supply pivotal constraint, obtaining lower closing prices. The proposed method offers a more suitable solution regarding intervention or handling mechanisms of the demand function.
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    Auctioning adequacy in south america through long-term contracts and options: From classic pay-as-bid to multi-item dynamic auctions
    (IEEE, 2009) Moreno Vieyra, Rodrigo Andrés; Bezerra, Bernardo; Barroso, Luis A.; Mocarquer, S.; Rudnick van de Wyngard, Hugh
    The adequacy problem in electricity market is becoming a very important issue as there is neither theoretical proof nor practical evidence of correct delivering of sufficient and timely generation capacity when it is needed in a real (imperfect) environment. In contrast, classical market design seems to fail when facing high demand growth and/or large hydro share as seen in several Latin American countries such as Chile, Brazil, Colombia and Peru among others. Currently, various mechanisms have arisen across this region with the intention of stimulating energy procurement and new investment. These are mainly based on long-term contract and options obligations, which are allocated through auctions. Auction theory then becomes very important to ensure optimal allocation and efficient prices for both the new generation and the end user. However, difficulties arise when applying pure auction theory because basic hypotheses are not met by most electricity markets. The objective of this paper is to address and discuss the Latin American experience with auction design for long-term contracts focusing on practical design and theory. The different mechanisms and auctions for ensuring supply adequacy are listed along with theoretical justification as part of the potential solution for the adequacy problem that different economies have proposed.
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    Challenges on integrating renewables into the Chilean grid
    (IEEE, 2010) Araneda, J. C.; Mocarquer, S.; Moreno Vieyra, Rodrigo Andrés; Rudnick van de Wyngard, Hugh
    The Chilean Electricity Law introduced an obligation to power traders, from 2010 to 2014, to certify that at least 5% of the electricity traded comes from renewable sources. From 2015 onwards, the obligation will increase by 0.5% annually until 10% in 2024. Several challenges need to be addressed to permit efficient access for renewable energies. One of these is the natural barrier to entry for new generators, originated in the radial characteristic of the transmission systems. In the past these systems have essentially developed, and adapted economically, to conventional generation and demand. International experience shows that grid operation and expansion needs to be “smarter†for allowing renewable power connection. In Chile, significant challenges have arisen in grid planning and pricing which this paper attempts to address. While new wind farms can be installed in 1.5 years, transmission infrastructure requires 3 to 6 years to be completed. In this framework, extensive construction times of new grid developments, considering community and environmental approval, require a long-term vision, which, in turn, provides regulatory signals in order to minimize bottlenecks for the integration of new generation, particularly renewable. On the pricing side, wind farms push large transmission expansions, but given regulatory arrangements, participate with a small part on transmission toll payments because of the low plant factors of wind generation. In addition, transmission planning under uncertainty, by taking account of different scenarios, and the concept of anticipatory investment becomes critical.
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    Congestion management and transmission rights in centralized electric markets
    (IEEE, 2004) Mendez Delaunoy, Roberto; Rudnick van de Wyngard, Hugh
    A new congestion management system is proposed, applied under nodal and zonal dispatches with implementation of fixed transmission rights (FTR) and flowgate rights (FGR), respectively. The FTR model proves to be especially suitable for congestion management in deregulated centralized market structures with nodal dispatch, while the FGR is suitable for decentralized markets. The main contribution of this work is a nontraditional valuation of FGR under a centralized market, such as those present in Latin America, that builds a link between both transmission rights under the same market structure. To accomplish that, a computational model is developed, implementing marginal theory where congestion components are introduced in the pricing model. An application to the Chilean Central Interconnected System indicates that FGR presents advantages over FTR regarding signals on grid use, but its application results in complications that make its implementation unattractive.
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    DEA efficiency for the determination of the electric power distribution added value
    (2004) Sanhueza Hormazabal, Raul Edgardo; Rudnick van de Wyngard, Hugh; Lagunas, Hector
    The application of data-envelopment analysis methodology is formulated as a tool to determine the distribution added value required in the tariff fixation processes of electrical power distribution that use the concept of model firm as a regulatory basis. In order to increase the reliability of the obtained results, a bootstrap technique is applied. Its application is illustrated within the framework of the latest regulatory process in Chile.
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    Disaster Management
    (IEEE, 2011) Rudnick van de Wyngard, Hugh; Mocarquer, S.; Andrade, Eduardo; Vuchetich, Esteban; Miquel Duran, Pedro Enrique
    In this paper its is discussed that the transmission and distribution facilities are more vulnerable to major earthquakes than the generation facilities. The design of the generation facilities usually adopts a higher design and building standards.
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    Distribution access pricing: application of the OFTEL rule to a yardstick competition scheme
    (IEEE, 2002) Recordon Zerwekh, Eduardo Andrés; Rudnick van de Wyngard, Hugh
    The paper formulates an access-pricing model applied to electricity distribution, based on the UK Office of Telecommunications (OFTEL) model, originally structured to price telecommunications monopolistic-essential facilities. The aim is to achieve an optimal access price charge, in an environment where a distribution network monopoly serves both regulated and nonregulated customers. The nonregulated market faces competition, so that the competitors must use the network to reach their customers. A usage-based hybrid model is proposed to couple with a tariff scheme for regulated customers that uses yardstick competition. A way to set appropriated opportunity costs by the use of the OFTEL model is introduced. Finally, the paper focuses on properly recognizing both regulated distribution and competitive supply costs. The scheme is assessed within the Chilean regulatory scheme, proposing a way to establish marginal and fixed distribution costs for distribution companies.
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    Distribution Network Rate Making in Latin America: An Evolving Landscape
    (IEEE, 2020) Moreno Vieyra, Rodrigo Andrés; Bezerra, B.; Rudnick van de Wyngard, Hugh; Suazo Martínez, C.; Carvalho, M.; Navarro Espinosa, Alejandro Andrés; Silva Montes, Carlos; Strbac, G.
    Following the trend observed in developed economies, various Latin American governments are committed to reducing greenhouse gas emissions, particularly in the power sector. In countries such as Chile, Peru, Colombia, Brazil, and Mexico, various regulatory policies have been issued to meet renewable-generation integration targets and satisfy the increasing demand from consumers for supply quality. Meanwhile, the integration of distributed generation (DG) in rural and urban areas as well as the increasing need to integrate electric vehicles (EVs) in urban areas are driving important reforms in the distribution sector.
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    Distribution Pricing: Are We Ready for the Smart Grid?
    (IEEE, 2015) Li, F.; Marangon, J.; Rudnick van de Wyngard, Hugh; Marangon, L.; Padhy, N.; Brunekreeft, G.; Reneses, J.; Kang, C.
    Energy transportation costs typically make up a quarter of consumers? electricity bills, and most of this amount (90% in the United Kingdom, 75% in Brazil and Spain, and 60% in India, for example) is due to energy transportation through the distribution network. This cost could escalate over the next few decades as distributed energy resources are expected to grow substantially in response to the financial incentives many governments have created for renewable and efficient generation to meet their CO2 reduction targets.
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    Flexible Connections: Solutions and Challenges for the Integration of Renewables in South America
    (IEEE, 2012) Rudnick van de Wyngard, Hugh; Barroso, Luiz; Llarens, Daniel; Watts Casimis, David; Ferreira, Rafael de Sà
    Feed-in tariffs, quota systems, and auction schemes are all used to stimulate NCRE growth in South America. These methods present common challenges in terms of development, operation, and transmission. Common solutions to these challenges are being developed, and Brazil is leading the way with its rapid incorporation of NCRE. The existing market, commercial, and regulatory frameworks may present barriers to the timely and cost-effective connection of renewable generation, as they may not be flexible and agile enough to allow for the connection of smaller, dispersed generators with short construction times. This has led to the revision of network tariff arrangements, including the review of network operating and design practices, security standards, access regimes, investment incentives, cost recovery, and rates. The experiences presented in this article illustrate some of the key initiatives and solutions being proposed to address the challenge of unlocking the doorway for renewables. Further concerns need to be addressed, however, with a broader vision that seeks convergence to an efficient, 21st-century, low-carbon energy system through more cooperative development of renewables and the required transmission assets.
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    From Reliability to Resilience: Planning the Grid Against the Extremes
    (IEEE, 2020) Moreno Vieyra, Rodrigo Andrés; Panteli, M.; Mancarella, P.; Rudnick van de Wyngard, Hugh; Lagos, T.; Navarro Espinosa, Alejandro Andrés; Ordonez, F.; Araneda, J. C.
    Although extreme events, mainly natural disasters and climate change-driven severe weather, are the result of naturally occurring processes, power system planners, regulators, and policy makers do not usually recognize them within network reliability standards. Instead, planners have historically designed the electric power infrastructure accounting for the so-called credible (or "average") outages that usually represent single or (some kind of) simultaneous faults (e.g., faults on double circuits).
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    Hydro or coal: Energy and the environment in Chile
    (IEEE, 2008) Rudnick van de Wyngard, Hugh; Mocarquer, S.
    Coal and hydro will be the main sources of electric energy in Chile for the near future, given that natural gas from neighbouring Argentina is not longer available and LNG price projections leave it only as a backup fuel. The country has limited energy resources, importing more than 73% of its energy. Hydroelectric untapped resources are significant, but they are mostly located in the extreme south of the country, in unpopulated areas of great unspoiled beauty. Non governmental organizations both within the country and from the US are strongly opposing the use of these resources. Renewables, which are only at an early stage, are argued as an alternative, but do not represent a solution with rates of growth of electricity demand over 6% a year. This summary discusses the issues being faced and the environmental dilemma faced by the country, where both coal and hydro produce some kind of impact. The role of the State and the private sector in determining the countrypsilas energy matrix arises as another central discussion.
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    Hydro power plants in Ecuador: A technical and economical analysis
    (IEEE, 2008) Salazar, Gabriel; Rudnick van de Wyngard, Hugh
    Private investment in generation plants in Ecuador has been null over the last 10 years due to several political and economical factors. The only important hydro plant over that period, a 250 MW plant, was constructed by the Ecuadorian State. At present, the Ecuadorian State and the Ministry of Electricity are the only ones initiating the construction of new hydro plants of significant capacity for the country. This reveals the failure of the existing competitive market model that has been in place for the last 10 years, particularly in relation to incentive to private investment. Arguments are being raised to return to a centralized mandatory planning scheme, under government direction, where the important hydro investments are made by the State and private investors are left with the thermo projects and small hydro.The presentation will discuss the hydro developments and future prospects.
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    Hydrothermal market simulator using game theory: assessment of market power
    (IEEE, 2003) Villar Suárez, Jorge Antonio; Rudnick van de Wyngard, Hugh
    The aim of this work is to build a model able to simulate a hydrothermal electric power market based on simple bids to a power exchange. The model studies the behavior of different market agents in a short-term horizon and delivers information about spot prices, use of water, and other relevant variables. Initially, a thermoelectric market is simulated through a static model based on Cournot concepts. The addition of hydroelectric power stations and time dependencies is made later, using a dynamic programming algorithm to build a dynamic model. In each stage and state of the dynamic programming, a Nash-Cournot equilibrium is determined to assess the behavior of the thermoelectric power stations (static model). Different strategies that firms can follow and the consequences of each one of them are analyzed. Market power mitigation effects of physical and financial bilateral contracts are also investigated. A case study with data on the Chilean power system is presented and analyzed.
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    Identifying Optimal Portfolios of Resilient Network Investments Against Natural Hazards, With Applications to Earthquakes
    (IEEE, 2020) Lagos, Tomás; Moreno, Rodrigo; Navarro Espinosa, Alejandro Andrés; Panteli, Mathaios; Sacaan, Rafael; Ordonez, Fernando; Rudnick van de Wyngard, Hugh; Mancarella, Pierluigi
    Although extreme natural disasters have occurred all over the world throughout history, power systems planners do not usually recognize them within network investment methodologies. Moreover, planners had historically focused on reliability approaches based on average (rather than risk) performance indicators, undermining the effects of high impact and low probability events on investment decisions. To move towards a resilience centred approach, we propose a practical framework that can be used to identify network investments that offer the highest level of hedge against risks caused by natural hazards. In a first level, our framework proposes network enhancements and, in a second level, uses a simulation to evaluate the resilience level improvements associated with the network investment propositions. The simulator includes 4 phases: threat characterization, vulnerability of systems components, system response, and system restoration, which are simulated in a sequential Monte Carlo fashion. We use this modeling framework to find optimal portfolio solutions for resilient network enhancements. Through several case studies with applications to earthquakes, we distinguish the fundamental differences between reliability- and resilience-driven enhancements, and demonstrate the advantages of combining transmission investments with installation of backup distributed generation.
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    Impact of Energy Efficiency Incentives on Electricity Distribution Companies
    (2010) Alvarez Danker, Federico Sebastián; Rudnick van de Wyngard, Hugh
    An analysis is made of the impact of diverse regulatory mechanisms and financial incentives that aim at conciliating the interests of the regulating entity and distribution companies, while tending towards the implementation of energy efficiency policies on the power distribution sector. To assess the outcome of the power distributors on a given regulatory scenario, a production-possibility model based on data envelopment analysis is developed. The methodology used adapts results gathered from international case-studies in order to ascertain the efficiency degree achieved by each regulating scheme. The analysis is subsequently applied on four representative companies of the Chilean power distribution sector, undergoing different energy efficiency levels required by the regulator. The results reveal that the introduction of white certificates of energy efficiency outperforms the other methods considered, as it succeeds on eliminating the disincentives at a minimal economic impact. Comparing the energy production-revenue decoupling mechanisms with the investment of the 1% in energy efficiency programs yields that the first method achieves betters results, provided that the regulator sets energy efficiency goals below 4% a year, whereas the second method is more effective concerning the global impact on the distributors.