Coordinated decisions for transmission and generation expansion planning in electricity markets

Abstract

SUMMARY This paper presents a new approach to coordinate the decisions of transmission and generation capacity expansion planning for a competitive electricity market in which only the generation sector is deregulated. The independent system operator (ISO) as transmission planner has a regulatory role in the strategic behavior of generation companies. To reach coordinated decisions, the model relies on an interactive and iterative process between generation expansion planning and transmission expansion planning. This repetitive process continues until reaching a converging point or fulfilling the stopping criterion assigned by the ISO. In order to consider random outages of network components as well as uncertainty of load and bid prices of generating units, the Monte Carlo simulation method is applied. The simulation results confirm the efficacy of the proposed model in the coordinated generation and transmission planning problem considering the uncertainties. Copyright © 2012 John Wiley & Sons, Ltd.