A Tri-Level Model of Centralized Transmission and Decentralized Generation Expansion Planning for an Electricity Market—Part I

Abstract

We develop a tri-level model of transmission and generation expansion planning in a deregulated power market environment. Due to long planning/construction lead times and concerns for network reliability, transmission expansion is considered in the top level as a centralized decision. In the second level, multiple decentralized GENCOs make their own capacity expansion decisions while anticipating a wholesale electricity market equilibrium in the third level. The collection of bi-level games in the lower two levels forms an equilibrium problem with equilibrium constraints (EPEC) that can be approached by either the diagonalization method (DM) or a complementarity problem (CP) reformulation. We propose a hybrid iterative solution algorithm that combines a CP reformulation of the tri-level problem and DM solutions of the EPEC sub-problem. KeywordsComplementarity problem, equilibrium problem with equilibrium constraints, generation expansion planning, mathematical program with equilibrium constraints, Nash equilibrium, transmission expansion planning Abstract-We develop a tri-level model of transmission andgeneration expansion planning in a deregulated power market environment. Due to long planning/construction lead times and concerns for network reliability, transmission expansion is considered in the top level as a centralized decision. In the second level, multiple decentralized GENCOs make their own capacity expansion decisions while anticipating a wholesale electricity market equilibrium in the third level. The collection of bi-level games in the lower two levels forms an equilibrium problem with equilibrium constraints (EPEC) that can be approached by either the diagonalization method (DM) or a complementarity problem (CP) reformulation. We propose a hybrid iterative solution algorithm that combines a CP reformulation of the tri-level problem and DM solutions of the EPEC sub-problem.

An N-k Analytic Method of Composite Generation and Transmission with Interval Load

“…The bi-level linear optimization model can be transformed into a single-level optimization model because the lower model is convex under the fixed value of decision variables of the upper level problem. There are two methods that can achieve the transformation and are widely applied to research on power systems under power deregulation [21][22][23], respectively:…”

“…If the big number is large enough, Equations (32) and (33) are equivalent to Equations (16) and (17). The maximum angle difference of lines is usually very small: reference [23] recommends using a value of 1.2 rad. The value used in this paper is 1.5 rad, which is large enough to per-unit power systems; thus, M ij,k equal to 1.5 b ij,k in this paper.…”

Impact ofCO2cap-and-trade programs on restructured power markets with generation capacity investments

“…Equilibrium conditions in both of these models are established resulting in a quadratic programming and an MPEC model, respectively. More recently, similar models have been developed incorporating transmission expansion decisions [21][22][23].…”

Multi‐objective, multi‐year dynamic generation and transmission expansion planning‐ renewable energy sources integration for Iran's National Power Grid

“…Many research works have been so far devoted to the coordinated GEP‐TEP problem. In this respect, Jin and Ryan present the coordinated GEP‐TEP problem while considering the centralized TEP and decentralized GEP through a tri‐level model. Furthermore, a tri‐level programming framework has been suggested in Hong et al, in which multiple contingencies have been considered along with the load demand uncertainty.…”