Generation Capacity Expansion Planning in Deregulated Electricity ...

Generation Capacity Expansion Planning in Deregulated Electricity ...

Chapter 4

Generation Capacity Expansion Planning in Coordination with

Transmission Resources

The main backbone of generation expansion planning exercise in power systems is the availability of

adequate transmission resources. As electricity demand growth takes place over the long term driven

by the growth of industries and the economy as a whole, there is a need to take into account the

individual demand growths specific to load centers and load regions. Moreover it is also important to

consider the feasibility of the selection of a particular generation technology at a certain location.

In the previous chapter, the generation investments selected, did not take into consideration the

availability of the resources. For example, if a coal-based generation is selected at a location, that

location should be expected to have adequate coal supply linkages within its vicinity for all practical

purposes. Similarly, an investment decision in hydro cannot be made without adequate water

resources at the location. In view of this, it is extremely important to introduce the concept of

‘location’ in the planning framework and arrive at long-terms plans that provide information on

where, when, how much, and what type of investment, in a comprehensive manner.

The long-term generation expansion plans must also provide some inputs to the transmission

system as to its adequacy and reliability and how it will be loaded when the new plans are introduced

in a dynamic manner, year by year. It is important to know whether the transmission system will be

able to provide secure and reliable transmission services or, it will require upgrades, and if

transmission system requires upgrades, which are the transmission circuits that require augmentation.

In this chapter, a 15-year generation expansion planning model is presented that takes into

consideration the transmission system model, and seeks to meet the location specific demand growth

over the long-term. The investor’s objective remains the same- that of maximizing its total profit over

the plan horizon.

The well-known IEEE 30-bus system has been used in the studies presented in this chapter; the bus

loads have been considerably increased to suit the present planning problem. The model incorporates

uncertain fuel prices for different technologies. Moreover, the individual buses have been identified

as candidate locations for specific generation technologies based on an assumption of availability of

appropriate resources at these buses. An expected bus-wise demand growth rate of 3% per year is

considered. This outcome of this proposed model are the determination of optimal timing, capacity

and location of specific technology generating units for investment as well as the long-term energy

dispatch from the investor firm’s perspective. The electricity prices are modeled as price duration


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