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A model and approach to the challenge posed by optimal power systems planning

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Abstract

Currently, there is a need to plan and analyze the electric power transmission system in greater detail and over larger geographic areas. Existing models approach the problem from different perspectives. Each model addresses different aspects of and has different approximations to the optimal planning process. In order to scope out the huge challenge of optimal transmission planning, this paper presents a new modeling approach for inter-regional planning and investment in a competitive environment. This modeling approach incorporates the detailed generator, topology and operational aspects found in production cost planning models into a larger framework that can find optimal sets of transmission expansion projects. The framework proposed here can be used in an auction to award investment contracts or as a part of a more general policy analysis. The solution yields the set of transmission projects that have the highest expected benefits, while also representing generic generation expansions under the same objective. The model is a two-stage, mixed-integer, multi-period, N-1-reliable model with investment, unit commitment, and transmission switching. The combination of combinatorial, stochastic and operational elements means this model may be computationally intractable without judicious modelling aggregations or approximations to reduce its size and complexity. Nevertheless we show via a dual problem that analysing the economics and sensitivity of the solution is computationally more straightforward.

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Notes

  1. Proposed Framework for Electricity Grid Planning, Discussion Draft, October 9, 2009, issued by representatives from the National Audubon Society, Conservation Law Foundation, Energy Future Coalition, ENE-Environment Northeast, Environmental Defense Fund, Natural Resources Defense Council, Piedmont Environmental Council, Sierra Club, Sustainable FERC Project and Union of Concerned Scientists.

  2. A public good has the properties that it is not possible to prevent others from consuming the good and the consumption by one does not prevent consumption by others. A private good has the properties that it is possible to prevent others from consuming the good and the consumption by one prevents consumption by others.

  3. A club good has the properties that it is possible to prevent others from consuming the good and the consumption by one does not prevent consumption by others.

  4. Firm and interruptible service can be created under these tariffs, similar to point-to-point service under the Order 888/890 tariffs with a fix of the contract path approach using flowgate rights portfolios.

  5. For example, see Illinois Commerce Commission, v. Federal Energy Regulatory Commission, United States Court of Appeals for the Seventh Circuit, August 6, 2009.

  6. Cooperative game theory contrasts with noncooperative game theory where market participants are not allowed to communicate explicitly with each other. Most competitive markets are analyzed under the noncooperative game theory paradigm, for example, a Nash or perfect equilibrium is a common model for deciding the optimal expansion.

  7. A defined group of market participants could be a former vertically integrated utility, an entire state or an individual market participant. If this grouping does not cross state boundaries, states could allocate costs within the group.

  8. For example, see SPP Balanced Portfolio approach. http://www.spp.org/section.asp?pageID=120.

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Authors and Affiliations

  1. Federal Energy Regulatory Commission, 888 1st St, NE, Washington, DC, 20426, USA

    Richard P. O’Neill & Eric A. Krall

  2. Arizona State University, Tempe, AZ, USA

    Kory W. Hedman

  3. University of California-Berkeley, Berkeley, CA, USA

    Shmuel S. Oren

Authors
  1. Richard P. O’Neill
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  2. Eric A. Krall
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  3. Kory W. Hedman
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  4. Shmuel S. Oren
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Correspondence to Richard P. O’Neill.

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Views expressed in this paper are not necessarily those of the Federal Energy Regulatory Commission, its members, FERC staff or any Commissioner.

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O’Neill, R.P., Krall, E.A., Hedman, K.W. et al. A model and approach to the challenge posed by optimal power systems planning. Math. Program. 140, 239–266 (2013). https://doi.org/10.1007/s10107-013-0695-3

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