A game-based power system planning approach considering real options and coordination of all types of participants

Abstract

With the ongoing advancement of global power marketization, the increasing diversity of stakeholders in the power market and their interactions have a significant impact on power system planning and operation. Traditional methods employ game theory to describe the interactions among market participants. However, these approaches fail to include all relevant participant types and overlook the long-term uncertainty value of planning schemes. Therefore, this paper proposes a game theory-based power system planning approach considering real options (RO) and coordination of all types of participants. First, the dynamic gaming interaction among supply-transmission-demand is studied, and the independent system operator is integrated into the game planning framework based on the overall perspective of power market operation. Moreover, the new power supply, grid planning, and operation of distributed generation (DG) are taken as decision variables based on the RO theory, and a game decision model of all participants in the power system planning considering the investment uncertainty is constructed. Finally, the iterative search algorithm is employed to solve the model, and the framework is validated based on the IEEE 30-bus system. The results indicate that through collaborative planning involving various market participants, Generation Companies and Transmission Companies expand their investments to maximize profits, while large power consumers reduce their investment in DG and instead increase their direct power purchases to lower costs. Moreover, these participants are inclined to pursue projects with higher asset value volatility, which further enhances their profit. By integrating RO theory with game theory, the proposed approach establishes a comprehensive planning framework that effectively addresses investment uncertainty. This integration enables market participants to make more optimal decisions, ultimately leading to an enhancement in the long-term economic performance of the power system.