Option value of dynamic line rating and storage

Electricity demand and renewables penetration are set to increase worldwide over the coming decades, thereby posing challenges related to increased peaks. Hence, significant network reinforcements may be needed over the coming years with a considerable challenge being the growing uncertainty that surrounds future connected load and generation capacity. This uncertainty inadvertently results in rising levels of stranding risk. Thus, new planning frameworks are needed that move away from the traditional deterministic approaches and utilize stochastic optimization techniques so as to encourage cost-efficient strategic investments through smart technologies by capturing their embedded option value. In this paper, the option value of Dynamic Line Rating and Storage technologies is computed and is shown to reflect the fact that such technologies can allow for generating considerable system savings through management of planning uncertainties.