Generation Capacity Expansion Planning in Deregulated Electricity ...

Generation Capacity Expansion Planning in Deregulated Electricity ...

Chapter 3

A Generation Planning Model for Investor Firms: Mixed Integer

Programming Framework

In Chapter-2 a generalized long-term planning model pertaining to an investor firm was presented.

The plan period was considered to be twenty-five years and the capacity addition variables were

considered to be continuous variables. A problem with such a model was that the generating unit sizes

that were determined were not of the standard sizes available in the market. Therefore, the investor

would not be able to use such a model in practical application. Therefore, there is a need to revise the

model and introduce proper unit sizes that are available from the manufacturers.

In view of the above, in the present chapter, a more realistic model is developed that considers

discrete unit sizes for capacity addition. In order to introduce discrete unit sizes, there is a need to

include binary decision variables in the mathematical model formulation.

Furthermore, in order to make the investment planning more practical, the planning horizon is now

reduced to 15 years, in all the analysis reported in the subsequent part of this thesis.

3.1 Features of the Developed Model

In Chapter-2, the basic features of the planning model were discussed in detail. The additional

features that emerge in this chapter are discussed below.

3.1.1 Discrete Unit Sizes

In this work it is assumed that the investor firm invests with discrete size of units, i.e., only certain

specified units capacity can be commissioned. This requires the introduction of binary variables and

an associated set of new constraints pertaining to the binary selection variables.

3.1.2 Assumptions Made in Modeling

• The basic assumptions made in the investment modeling framework have been discussed in

the previous chapter, and are valid in the present work as well. The additional assumption in

this work is:


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