A Decouple Optimization Method for Power Technology Selection in Competitive Markets

Abstract

After electricity market opening, the procedure for generation systems expansion became a complicated matter because there are many available technological options and various generating unit sizes, the production cost depends directly to the price and the availability of the fuels and environmental protection and health risk issues are major components of the total production cost. Nowadays, electric utilities and independent power producers cannot depend on the simple models used before the electricity market opening. It is necessary to analyze the results obtained using different parameters for different cases and technological options. This can only be achieved by the use of computational methods in which the operation of the various generating units of a power system can be simulated in an optimized sense. The purpose of this article is to demonstrate the various capabilities of a decoupled optimization method for power technology selection in a competitive electricity market. The user-friendly software tool developed, namely I.P.P. algorithm (independent power producer technology selection algorithm), can be used for the selection of an appropriate least cost power generation using technical, economic, and environmental analysis. The software takes into account the capital cost, the fuel consumption and cost, the operation cost, the maintenance cost, the plant load factor, etc. All costs are discounted to a reference date at a given discount rate. Each run can handle 50 different candidate power technologies simultaneously. Based on the above input parameters for each candidate technology, the algorithm calculates the least cost power generation configuration in real prices and the ranking order of the candidate schemes.