Summary Ever‐increasing energy demand and technology development are continuously pursuing the attention of power system planners to design an optimum strategy for supplying future electrical demand. Generation expansion planning turns out to be a crucial step for an efficient energy management system in a modern power grid. In this paper, a novel whale optimization algorithm with penalty factor approach (WOA‐PFA) framework has been developed to solve a nonlinear, discrete, dynamic, highly complex, heavily constrained GEP problem. Reliability evaluation is accomplished using equivalent energy function approach. A virtual mapping procedure is utilized to add computational strength to the WOA‐PFA framework. Emission reduction is performed by utilizing total emission reduction constraint. The results are organized in four case studies starting with base power plants and adding wind, solar, and solar with storage facility in succession for the rest of case studies. Simulation results prove that the proposed WOA‐PFA shows promising results in terms of the least cost and computational time as compared with the techniques presented in the literature.