2014/06/23 by Pineda, Salvador, Morales, Juan M., Ding, Yi +1
#FOS: Mathematics #Optimization and Control (math.OC)
paper · doi:10.48550/arxiv.1406.5923
Generation expansion planning has become a complex problem within a deregulated electricity market environment due to all the uncertainties affecting the profitability of a given investment. Current expansion models usually overlook some of these uncertainties in order to reduce the computational burden. In this paper, we raise a flag on the importance of both equipment failures (units and lines) and wind power correlation on generation expansion decisions. For this purpose, we use a bilevel stochastic optimization problem, which models the sequential and noncooperative game between the generating company (GENCO) and the system operator. The upper-level problem maximizes the GENCO's expected profit, while the lower-level problem simulates an hourly market-clearing procedure, through which LMPs are determined. The uncertainty pertaining to failures and wind power correlation are characterized by a scenario set, and their impact on generation expansion decisions are quantified and discussed for a 24-bus power system.