An Investment Decision-Making Approach for Power Grid Projects: A Multi-Objective Optimization Model

Abstract

With the reform of the power system in China, investments in power grid projects across the whole power system are increasing. However, there are various objectives to achieve in the investment decision processes of power grid projects, so the rational investments of a grid project can be seen as a multi-objective optimization problem. Meanwhile, these issues have rarely been studied at home and abroad, and this paper will fill this gap. As a result, this study critically analyzed the application of a multi-objective optimization model to power grid investment. Firstly, the objective factors of grid investments were explored, which were quantified through quantitative methods. Secondly, based on the characteristics of power grid investment, a multi-objective optimization model was established, and the assumptions and constraints of the model were presented. Finally, NSGA-II was used for solving the multi-objective optimization model. The results show that: (1) Multi-objective optimization models are suitable for the study of and deriving solutions for power grid investment by establishing suitable objective functions, assumptions and constraints, (2) According to the conventional steps of NSGA-II, suitable steps can be established to search for an optimal solution to the objective set of a power grid investment and (3) Due to the different concerns of different project scenarios, Pareto frontier solutions can be selected as the practical references of power grid projects. Therefore, the solution set makes the implementation scheme more flexible.