Risk‐constrained multi‐level framework for coordination of generation and transmission expansion planning in liberalised environments – part I: theory and formulation

Abstract

In this two-article set, a new multi-level framework is presented for coordination of generation and transmission expansion planning (G&TEP) in liberalised electricity markets. Part I is mainly dedicated to mathematical modelling of the G&TEP problem. The main aims of the proposed framework are not only to develop a holistic model for the G&TEP problem, but also to evaluate impacts of expansion plans on market participants’ strategic behaviours. To do so, the proposed methodology is decomposed into a planning master problem and an operating slave problem. In the slave problem, the first level indicates market participants’ strategic interactions and the second level represents a pool-based electricity market. In the master problem, an independent system operator model is described to coordinate decentralised generation expansion planning in the third level with centralised transmission expansion planning in the fourth level. In addition, the offered framework uses a well-founded information-gap decision theory to minimise risks of planning arising from severe uncertainties. The newly developed framework is formulated as a non-convex mixed-integer non-linear optimisation problem. Hence, a novel two-stage multi-dimensional melody search algorithm is widely employed to determine the best solution. The profitableness of the developed framework is illustrated in part II of this two-article set.