Renewable integration through transmission network expansion planning under uncertainty

In this paper we bring together a stochastic mixed integer programming model for transmission network expansion planning, incorporating portfolios of real options to address the evolution in time of uncertain parameters, with the adjusted generalized log-transformed model, to expand the number of correlated parameters that can be modeled. We apply these methods to evaluate the potential contribution of underwater transmission investments to increase renewables penetration in the Azores archipelago. The approach also includes expansion lead times, due to the large timespans involved in the construction of new transmission lines. Our analysis focuses on a set of the four closest islands in the archipelago, Pico, Faial, S. Jorge and Terceira, and shows that even though investments are delayed and the future network configuration varies according to the evolution of renewable generation scenarios, an investment in underwater transmission, if technically feasible, within the assumptions of our model, could in fact contribute to increase renewables penetration, by enabling islands with an excess in generation from renewable sources to supply other islands in a deficit situation.