Generation Capacity Expansion Planning in Deregulated Electricity ...

Generation Capacity Expansion Planning in Deregulated Electricity ...

[3]. Fig.1 shows the schematic overview of the process of generation planning, as discussed above, in

the context of deregulation.

1 st Stage

2 nd Stage

Investor-1 Investor-2 Investor-n

Centralized Planning Authority

Fig.1: Schematic overview of generation planning in deregulation

Some of the important issues that need to be taken into account by the central planning authority in

its plan approval and coordination process are listed below:

• A long-term generation expansion plan should provide an acceptable level of reliability and

meet the future demand growth of the power system taking into account all individual

submission of investment proposals from independent parties,

• The plan should be able to convince governmental regulating agencies that it will improve

the overall market efficiency,

• The final approved plan should not deteriorate the security of the transmission network,

Generation expansion plan coordination carried out by the central planner should be in a way

that it does not give rise to market power to any single entity,

• Uncertainties and risk factors arising from electricity market price volatilities, regulatory

changes, demand growth, etc., need to be considered in the coordination process,

• It should be mentioned here that the main focus of the present thesis is to specifically

examine and dwell upon the first stage of the planning process only. Therefore, in this thesis

we will not discuss the issues of plan coordination or systems level generation expansion,

rather the work will examine the generation expansion planning tasks from the perspective of

an individual investor.


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