Transmission Augmentation With Mathematical Modeling of Market Power and Strategic Generation Expansion—Part I

Abstract

This paper proposes a new mathematical structure for evaluating the economic efficiency of transmission investment in a liberalized electricity market. The problem faced by a transmission planner is modeled using the concept of social welfare from economics. The behavior of generators is modeled as the Nash equilibrium of a strategic game. The Nash solution concept is reformulated as an optimization problem and a new concept-the Stackelberg-Worst Nash equilibrium-is introduced to resolve the problem of multiple equilibria. The proposed structure can take into account the effects of a transmission augmentation on both market power and strategic generation investment. Accordingly, the optimal solution to the transmission planner's problem may allow additional transmission capacity both to reduce market power and to defer investment in the generation sector. A methodology is proposed to decompose the benefits of a transmission augmentation policy into the efficiency benefit, competition benefit, and the deferral benefit. The outcomes of the proposed approach to transmission augmentation are compared with the outcomes of two other approaches to transmission augmentation using a simple three-bus network example.

Multi-national transmission planning using joint and disjoint solutions

“…Also, the link between node 2 and node 4 (u 1 ) is located in TSO1, link between node 2 and node 9 (u 3 ) in TSO3s area, and the link between node 3 and node 6 (u 2 ) in TSO2s area. The transmission line data is given in Table I. Each TSO is modelled based on the designed system in [12]. The existing lines are drawn with solid lines while the three candidate lines are presented with the dashed lines.…”

Sequential Coordination of Transmission Expansion Planning With Strategic Generation Investments

“…In this paper, transmission expansion is modeled as capacity upgrades [15], [41], [42], [43]. This helps us to focus better on coordination issue rather than making our mathematical models complicated.…”

“…In this paper, there is no sequence between ISO and Gencos decisions and the decisions are made simultaneously. Reference [15] models the proactive coordination in the context of strategic investments by Gencos. A modified genetics algorithm is proposed to find a good solution of the proposed model.…”

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

“…The problem was formulated as a four level model and it was approached by agent-based system and search-based techniques. Hesamzadeh et al [23] [24] studied a new framework of transmission augmentation planning problem with strategic generation expansion and operational decision and solved a tri-level program by a genetic algorithm.…”

“…The objective of the system operator, to maximize the total net surplus, cannot be reduced to minimizing cost. The problem structure is also similar to [23] [24] but we consider expansion as new transmission lines rather than augmentation of the existing circuits, priceresponsive demand functions, Cournot competition among GENCOs in the operational level, and surplus maximization as the objective function for the system operator.…”