O.R. ApplicationsDeveloping concurrent investment plans for power generation and transmission
Introduction
An adequate electric power generation and transmission capacity is essential for a sustained economic growth. As demand for power increases rapidly in developing countries, congestion becomes a key factor in the smooth functioning of the generation system and security of supply.
Power generation and transmission should be planned in an integrated manner since they constitute two inseparable components of electrical power infrastructure. Transmission plans have immediate impacts on generation development schemes. Concurrent planning of generation and transmission is particularly important in developing countries, where substantial loss of natural resources exist due to congested lines and a standard grid system is not yet developed. In some developing countries, there exists a substantial potential of renewable resource based generation at locations that are remote to industrialized regions. The availability of adequate access to the transmission system has a strong impact on the locations, types and sizes of generation facilities that are added to the system.
An important factor to be considered is that many developing countries are also in the process of liberalizing the electricity market. In competitive market conditions, where generation is privatized and electricity prices depend on marginal generation costs, congestion prevents the full exploitation of market opening, because it increases unit electricity prices (consumer costs) and leads to undeserved gains or losses for generating firms affecting their return on investment (producer's loss). Consequently, a reliable transmission planning system that accounts for medium to long-term generation capacity planning is required to prevent any intentional or non-intentional blockage in the transmission system.
Bottlenecks in the transmission system also affect international electricity trade. Expansions and upgrades of domestic transmission networks that are coupled with generation planning may relieve the load on cross-border interconnections and increase bulk international electricity trade. The impacts of domestic generation patterns on trans-national lines are discussed in detail in recent reports concerning transmission systems in Europe and US (EC Directorate General Energy and Transport, 2001; Hirst and Kirby, 2001).
Altogether these issues place the focus on the need to analyze generation and transmission investment plans together such that de-congestion, enhanced market trade and cleaner energy generation can be achieved.
In this paper, a model is developed for obtaining a dynamic long-term investment plan involving strategic decisions on the expansion of electric power infrastructure including generation and high voltage transmission. The model is tested using data pertaining to a highly industrialized region in Turkey and investment scenarios are developed for a planning horizon that covers the years 2000–2010. The proposed model takes into account the restrictions of the region's high voltage interconnected transmission network explicitly. It assumes that transmission investment plans are centralized and generation is not yet fully privatized. This reflects the current situation in Turkey where generation plants are built under “Build, Operate and Transfer” contracts. The model aims to minimize the net present worth of generation and transmission investment costs and generation operating costs while satisfying energy demand.
The output of the model provides the optimal selection of the locations and sizes of new generation facilities on the interconnected network and the transmission network expansions required to satisfy future load. The model also gives a foresight on the return on investment for building new generation plants in different regions because it specifies the optimal future utilization rates of generation capacity in existing and planned facilities. An extension of this model could be to incorporate competitive electricity market policies in investment strategies.
In the following sections, the problem background is discussed briefly and the mathematical formulation of the model is conveyed. Then, a practical procedure used to identify feasible and improved solutions is described, and the investment scenarios developed for Marmara region (Turkey) are illustrated.
Section snippets
Problem background
Power systems planning research is mainly focused on operational issues such as minimizing loss in the transmission system and minimizing operational costs of generation (unit commitment problem). Optimal power flow models are developed for these purposes. These models represent real time restrictions of the transmission network and the existing portfolio of generation units as system operating constraints and aim at identifying the real time optimal mix of generation units that would satisfy
Mathematical formulation
The mathematical formulation of the integrated model and the notation are given below.
set of load centers and buses where power stations exist for stepping up or down voltages of different transmission lines (demand nodes and transshipment nodes)
set of existing and potential generation facilities
- I
set of import–export nodes
set of all nodes,
set of all transmission lines (arcs) including proposed lines and voltage levels
set of all transmission voltage levels (transmission load
Sets
A practical heuristic for achieving feasible and improved solutions
The model is first solved as a multi-period CNLP omitting constraints , , , , . Thus, flows are not restricted by the transmission network. The resulting objective function value, that only comprises of generation investment and operating costs and costs of imported energy, is a lower bound (LB) for the integrated model and serves as a basis of comparison.
Next, the model is solved with the existing transmission restrictions and possible upgrade propositions that do not require exception
Description of the current system
The model and the CT procedure are implemented on the electricity transmission and generation system of Marmara region in Turkey. The investment plan consists of 3 macro planning periods (years 2000, 2005, 2010), each representing 5 years. The data is collected from the publications of the Turkish Electricity Agency (1997) and the Turkish Planning Agency that updates parameters such as geographical and sectoral energy consumption rates every 5 years. The transmission network map is dated 1998,
Conclusion
An integrated mathematical model is developed for planning long-term electric power transmission and generation investments. The model explicitly considers the capacity restrictions of the interconnected transmission network at high voltage levels. In the implementation of the model, it is observed that transmission constraints have significant impacts on the choice among generation expansion alternatives and on plant utilization rates. The proposed model is an intermediary between macro models
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