Generation Capacity Expansion Planning in Deregulated Electricity ...

Generation Capacity Expansion Planning in Deregulated Electricity ...

the circuit-breakers between the lines, transformer between different voltage buses are also shown in

the figure.

4.3.2 Investment vs. Transmission line loading: Base case study

The optimal investment decisions of the firm are obtained from the solution of the model discussed in

Section 4.2. The model is solved for the objective function that is maximization of firm’s profit while

using the available transmission resources without capacity cap on the transmission line of given

transmission system, optimal decisions are obtained, as shown in Table XIII. Fuel prices are assumed

to be increasing at 3% and 2% per year for gas and coal price respectively. Here IRR parameter is not

considered to make framework less complex, IRR issues are considered for the future work.


Year of


At Bus-7 Coal Unit



At Bus-29 Gas-Fired Unit


1 300 100

3 100

6 300

These capacity investment decisions assume that transmission capacity expansion would be

provide by the centralized planning authorities to support the investment plan in a cost effective

manner. After obtaining the optimal decision during the plan horizon their effect on transmission line

loading is studied, which shows that some of the transmission line get overloaded during the 15-year

of planning period as demand growing 3% every year, the transmission lines capacities that are

expected to be overloaded during the plan period are shown in Table XIV and Fig. 26.

It is to be noted that this analysis is being carried out from the perspective of one single investor,

and how its investment decisions will cause transmission line overloads. In practical systems, there

will be multiple investors, and hence their respective decisions will also impact the transmission line

loadings. The central planning authority needs to take into account all such individual plans and

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