EEng6021

Power System planning and reliability

Girmaw Teshager Bitew (PhD)

2. Power system planning

A. Introduction

B. Operational planning
1

C. Expansion planning
A reliable power system is due to well done planning

Reliability Planning
Power System Studies, a Time-horizon Perspective
Expansion
1 year – 10 years Power System Planning planning

weeks – a year Maintenance

unitcommitment Operational
planning
Minutes –
Economic dispatch & OPF
weeks
Automatic Generation
Control
Milliseconds
Power System Dynamics

Control
- seconds

system
Power
Power flow
Control
Nanoseconds–
Power System Transients
micro seconds
 A. Introduction: Power system planning
Power system planning is part of a more general problem, that of energy
and economic development planning.
Its objective is therefore to determine a minimum cost strategy for long-
range expansion of the generation, transmission and distribution systems
adequate to supply the load forecast within a set of technical, economic and
political constraints.
Traditionally, power system planning had been mainly related to
generation expansion planning. This is due mainly to that the perception of
fact that investment in transmission lines is a relatively small fraction of the
investment in the construction of power systems.
 A. Introduction: Power system planning

• Definition: A process in which the aim is to decide on new as well as

upgrading existing system elements, to adequately satisfy the loads for a
foreseen future.
• Elements can be:
 Generation facilities,
 Substations,
 Transmission and distribution lines and/or cables,
 Capacitors/Reactors , etc.
 A. Introduction
Power system planning

The decision should be

• Where to allocate the elements (e.g. the sending and receiving end
of a line),
• When to install the elements (for example, 2024),
• What to select, in terms of the element specifications (eg number
of bundles and conductor type).
The loads should be adequately satisfied.
 A. Introduction
 The power system operation and planning focuses
on planning and operation of interconnected power
systems.
 It aims to provide a reliable and efficient supply of
electricity at any time.
 Operation of the power system is a very complicated
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and critical task that must be supported by a strong

planning process.
 A. Introduction
Timescales of different power systems planning problems:
1. Short-term planning (operational planning):
a. real-time operation  minutes to days
b. optimal power flow  hours to days
c. unit commitment hours to days
d. automatic generation control hours to days
e. economic dispatch  days to weeks
f. maintenance  weeks to year
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2. Long-term planning: (expansion planning: years)

a. transmission/network expansion
b. generation expansion
 B. Operational planning

 Power system operational planning to utilize the

existing capacity in the best possible manner is of
prime importance and is particularly relevant in a
developing economy.
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 B. Operational planning
It considers various related activities like:
 economic dispatching,
 generation scheduling/ unit commitment,
 optimal power flow,
 maintenance scheduling ,
 transportation,
 demand-side management options, and 10

 unmet energy distribution among different areas in case

of inadequate system capacity.
 B. Operational planning
The power system operations are required to meet
multiple objectives, namely:
 minimizing the total costs,
 minimizing the total emissions, and
 maximizing the generating system reliability
(minimizing the loss of load expectation).
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 B. Operational planning
Optimization is a process of maximizing or minimizing a given function
(objective function) by finding the best values of its independent variables
(decision variables) from the set of available alternatives (defined by
constraints).

I. Economic Dispatch Problem:-

 is concerned with finding how much power each unit should
generate for a given demand, while minimizing the total operational
costs, which are generally expressed in nonlinear form.
 Economic Dispatch: Formulation
 The goal of economic dispatch is to determine the generation
dispatch that minimizes the instantaneous operating cost. It can be
constrained or unconstrained.

 The constrained one is given by:

𝑀𝑖𝑛𝑖𝑚𝑖𝑧𝑒 𝐶𝑇 = 𝐶𝑖 (𝑃𝐺𝑖 ) where 𝑪𝒊 𝑷𝑮𝒊 = 𝜶𝒊 + 𝜷𝒊 𝑷𝑮𝒊 + 𝜸𝒊 𝑷𝟐𝑮𝒊 $/𝒉𝒓

𝑖=1

𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜: the following constraints:

 Economic Dispatch: Formulation
1. Equality constraints
• Power balance
𝑁
• 𝑖=1 𝑷𝑮𝒊 = 𝑷𝑫 + 𝑷𝒍𝒐𝒔𝒔
2. Inequality constraints
• Generator Constraints

 The KVA loading in a generator is given by 𝑃2 + 𝑄2 and this should

not exceed a pre-specified value of power because of the temperature
rise conditions
 Economic Dispatch: Formulation

 The maximum active power generation of a source is limited by thermal consideration

and minimum power generation is limited by the flame instability of a boiler.
 Hence the generator power P cannot be outside the range stated by the inequality,

• 𝑷𝒎𝒊𝒏
𝑮𝒊 ≤ 𝑷𝑮𝒊 ≤ 𝑷𝒎𝒂𝒙
𝑮𝒊

 Similarly, the maximum and minimum reactive power generation of a source is limited.
 The maximum reactive power is limited because of overheating of rotor and minimum is
limited because of the stability limit of machine.
 Hence the reactive power generation cannot be outside the range stated by inequality,

• 𝑸𝒎𝒊𝒏
𝑮𝒊 ≤ 𝑸𝑮𝒊 ≤ 𝑸𝒎𝒂𝒙
𝑮𝒊
 Economic Dispatch: Formulation

• Voltage Constraints

 It is essential that the voltage magnitudes and phase angles at various

nodes should vary within certain limits.

 The normal operating angle of transmission lies between 30 to 45

degrees for transient stability reasons.

 A lower limit of delta assures proper utilization of transmission capacity.

• 𝑽𝒎𝒊𝒏
𝑮𝒊 ≤ 𝑽𝑮𝒊 ≤ 𝑽𝒎𝒂𝒙
𝑮𝒊

• 𝜹𝒎𝒊𝒏 ≤ 𝜹 ≤ 𝜹𝒎𝒂𝒙
 Economic Dispatch: Formulation

• Running Spare Capacity Constraints

 Spare capacity represents reserves in the installed capacity and is

necessary to ensure that the power system can respond to load
increase. Having adequate spare capacity is essential because no
power plant can be 100% reliable.
 Economic Dispatch: Formulation

 The total generation should be such that in addition to meeting load

demand and losses a minimum spare capacity should be available

i.e. 𝑮 ≥ 𝑷𝒑 + 𝑷𝒔𝒐

• where G is the total generation and 𝑃𝑠𝑜 is some pre-specified power.

 A well-planned system is one in which this spare capacity Pso is

minimum.
 Economic Dispatch: Formulation

• Transmission Line Constraints

 The flow of active and reactive power through the transmission line
should be less than its thermal capability of the circuit and is expressed
as, 𝑪𝒑 ≤ 𝑪𝒑 𝒎𝒂𝒙

• where 𝑪𝒑 𝒎𝒂𝒙 is the maximum loading capacity of the line.

 Economic Dispatch: Formulation

• Transformer tap set

• 𝑻𝒎𝒊𝒏
𝒌 ≤ 𝑻𝒌 ≤ 𝑻𝒎𝒂𝒙
𝒌

𝒎𝒊𝒏
• where 𝑻𝒌 is the transformer tap 𝒌, 𝑻𝒌 is the minimum of
transformer tap 𝒌 and 𝑻𝒎𝒂𝒙
𝒌 is the maximum of transformer tap 𝒌.

 The equation of transformer tap stages have characteristic to control

the tapping of transformer close to central. It is defined as:
𝟐
𝑻𝒌 −𝑻𝒎𝒊𝒏 − 𝑻 𝒎𝒂𝒙
−𝑻𝒌
• 𝑺𝑻𝒌 = 𝒌 𝒌
𝑻𝒎𝒂𝒙
𝒌 −𝑻 𝒎𝒊𝒏
𝒌
 Economic Dispatch: Formulation

• where 𝑺𝑻𝒌 is stages of transformer taps 𝒌

 For autotransformer, tap 𝒌 should be 𝟎 and 𝟏

 For two winding transformer, it should be between 𝟎 and 𝒌

• Network security constraint

 These constraints are associated with both under normal operating

conditions and for specified disturbances, such as outages or equipment
failures.
 II. Unit commitment (UC)
UC is the process of determining which
units should be committed at each
period and how much they should
generate to minimize the operating
cost for that period, and hence,
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minimize the operating cost for the
overall period.
 Unit commitment

 The objective function of the UC problem can be formulated as:

𝑇 𝑁 𝑇 𝑁

min 𝐹 𝑃𝑖𝑡 , 𝑈𝑖𝑡 , 𝑆𝐶𝑖𝑡 , 𝑆𝐷𝑖𝑡 = 𝐹𝑖 𝑃𝑖𝑡 + 𝑆𝐶𝑖𝑡 1 − 𝑈𝑖𝑡−1 𝑈𝑖𝑡 + 𝑆𝐷𝑖𝑡 1 − 𝑈𝑖𝑡−1 𝑈𝑖𝑡−1
𝑡=1 𝑖=1 𝑡=1 𝑖=1
𝑡 2
where 𝐹𝑖 𝑃𝑖𝑡 = 𝛼 + 𝛽𝑃𝑖𝑡 + 𝛾 𝑃𝑖
Subject to : Minimum down-time:
power balance constraints: 𝑜𝑓𝑓(𝑡−1) 𝑡
𝑁
𝑇𝑖 − 𝑇𝑖,𝑑𝑜𝑤𝑛 𝑈𝑖𝑡 − 𝑈𝑖𝑡−1 ≥ 0.
𝑈𝑖𝑡 𝑃𝑖𝑡 = 𝑃𝑑𝑡 Ramp rate
𝑖=1
𝑢𝑝,𝑚𝑎𝑥
Spinning reserve constraints: 𝑃𝑔 𝑖, 𝑡 − 𝑃𝑔 𝑖, 𝑡 − 1 ≤ 𝑃𝑔𝑖 ;
𝑁
𝑑𝑜𝑤𝑛,𝑚𝑎𝑥
𝑃𝑑𝑡 + 𝑃𝑟𝑡 − 𝑃𝑖,𝑚𝑎𝑥 𝑈𝑖𝑡 ≤ 0 𝑃𝑔 𝑖, 𝑡 − 1 − 𝑃𝑔 𝑖, 𝑡 ≤ 𝑃𝑔𝑖
𝑖=1 Startup cost
Generation limits: 𝑜𝑓𝑓(𝑡−1)
−𝑇𝑖
𝑆𝐶𝑖𝑡 = 𝑋𝑖 + 𝛿𝑖 1 − exp
𝑃𝑖,𝑚𝑖𝑛 𝑈𝑖𝑡 ≤ 𝑃𝑖𝑡 ≤ 𝑃𝑖,𝑚𝑎𝑥 𝑈𝑖𝑡 𝐾𝑖
Minimum up-time: On/offline minimum level constraints

𝑇𝑖
𝑜𝑛(𝑡−1) 𝑡
− 𝑇𝑖,𝑢𝑝 𝑈𝑖𝑡−1 − 𝑈𝑖𝑡 ≥ 0. 𝑃𝑖𝑡 = 𝑃𝑖,𝑚𝑖𝑛 ,
𝑖𝑓 𝑈𝑖𝑡−1 = 0 𝑎𝑛𝑑 𝑈𝑖𝑡 = 1 OR 𝑈𝑖𝑡 = 1 𝑎𝑛𝑑 𝑈𝑖𝑡+1 = 0
 B. Operational planning

III. Optimal power flow:

 Since electric systems are dynamic by nature, upper and
lower bounds are defined for the essential parameters and
thus both planning and operation are focused on
maintaining them within limits as well as correcting any
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deviation.
 Optimal AC power flow
Optimal AC power flow is an extension of a conventional economic dispatch
that aims at determining the optimal settings of control variables while
respecting various constraints.
General optimal power flow problem Minimize 𝐹 (𝑥, 𝑢)
Subject to
𝑔 (𝑥, 𝑢) = 0
ℎ ( 𝑥, 𝑢) ≤0
𝑔(𝑥, 𝑢) represents nonlinear equality constraints (power flow equations) and ℎ(𝑥,
𝑢) is nonlinear inequality constraints on the vectors 𝑥 and 𝑢.
The vector 𝑥 represents non-control parameter. Those that are nor decision
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variables.
The vector 𝑢, on the other hand, are variables we are trying to find their optimal
settings. They are also called control variables.
 Optimal AC power flow

The vector 𝑥 contains the dependent variables including

bus voltage magnitudes and phase angles,

the Mvar output of generators designed for bus voltage control.

The vector 𝑥 also includes fixed parameters such as

reference bus angles;

Non-controlled generator MW and Mvar outputs;
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non-controlled load on fixed voltage;

line parameters; and so on.
 Optimal AC power flow

The vector 𝑢 consists of control variables that we would like to

optimize :

active and reactive power generation,

phase-shifter angles, net interchange,
load MW and Mvar (load shedding),
DC transmission line flows, 28

control voltage settings,

Load-tap-changing (LTC), transformer tap settings and so
Optimal power flow – cost minimization

Minimize

Subject to constraints

29
 Optimal power flow – active power loss minimization

 Mathematical form, minimize

where

Hence, the objective function becomes (in rectangular form)

=
30

Subject to the constraints defined for cost minimization

 Optimal power flow – reactive power planning

Aims at finding optimal setting and operation of reactive power sources

with a minimum possible cost so that acceptable voltage profile can be
achieved.

Objective is minimization of

Subject to: constraints and limits on the FACTS devices

31
 DC OPF
D C OPF model is one example which linearizes the equality load flow
constraint so that LP or QP can be used.
In DC OPF, the following assumptions are considered:
 Line resistance (active power losses) are negligible 𝑅 ≪ 𝑋.
 Voltage angle differences are very small sin 𝜃 = 𝜃; cos 𝜃 = 1
 Voltage magnitudes are 1 pu (flat voltage profile).
 Tap settings are all ignored.

D C power flow model

AC power flow model 32
 DC optimal power flows

 The objective function is to minimize the overall cost of power

generation subject to the constraints.
𝑛

𝑚𝑖𝑛𝑖𝑚𝑖𝑧𝑒 𝐶𝑔𝑖
𝑖=1

Subject to constraints
 B. Operational planning
IV. Real-time operation:
 Electric power system planning is focused on defining and
sizing the necessary facilities to reach all users according
to certain quality standards.
 During real-time operation, all the electrical magnitudes
34

must be maintained close to their nominal values despite

the effects of demand evolution and any unpredictable
 B. Operational planning
Real-time operation:
 Since electric systems are dynamic by nature, upper and
lower bounds are defined for the essential parameters and
thus both planning and operation are focused on
maintaining them within limits as well as correcting any
deviation. 35
C. Expansion planning

36
Structure of power system planning
State planning & energy policy

Energy Planning

Load forecasting

Generation planning

Network planning
 Structure of power system planning
Energy plan is a statement of the choices made by decision-makers at any one
point in time in order to meet specific goals and objectives.

Energy
Economic
demand
analysis
analysis Supply/
Impact Review
demand
evaluation evaluation
Energy Energy balance
resource technology
evaluation evaluation
Integrated analysis
Iteration
Data base development

Figure: Typical sequence of tasks in energy planning

 C. Expansion planning
Expansion planning in electric power industry is a multi-stage process,
where the decisions made at the previous stages are specified at each
subsequent stage.
The complexity of this process is explained by the need to consider many
important factors and the uncertainty about the future development of the
energy sector.
Under the conditions of liberalized relationships in electric power industry,
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the process of analyzing and making decisions on its development involves

many participants (stakeholders) that have different interests.
 C. Expansion planning

Stakeholders include electric power companies, consumers,

investors, public organizations, and authorities.
Today, the coordination of interests of stakeholders and the
formation of mechanisms for ensuring the development process
become the main objectives of expansion planning of electric power
40

systems and companies

 C. Expansion planning
Main steps of planning:
 Electric load forecast 5 to 30 years into the future;
 Evaluation of the economical and technical characteristics of the existing
system.
 Evaluation of energy resources available in the future and the foreseeable
trends in technical and economic developments.
 Determination of economical and technical characteristics of the plants
41

available for expansion.

 C. Expansion planning
Main steps of planning:
 Determination of the economic and technical parameters affecting decisions
such as discount rate, level or reliability required from the generating system,
etc.
 Choice of a procedure to determine the optimal expansion strategy within the
imposed constraints.
 Qualitative review of the results to estimate the viability of the proposed
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solution.
 C. Expansion planning
Models and Methods:
Electric power companies develop mathematical models and
methods for expansion planning of electric power industry as the
following conventional directions, as example;
 Transformation of methodological principles;
 Generation expansion planning; 43

 Electric network expansion planning;

 Joint generation and transmission expansion planning
 1. Transformation of methodological principles;
 Considerations:
 costs + losses+ economic assessment of environmental impact
 liberalization and deregulation for addressing uncertainty factors
 Considering the uncertainty-- the ideology of approaches to the
expansion planning is that the companies should transform from
optimization to forecast and simulation, and from planning to a
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development strategy
2. Generation expansion planning;
 Some authors do not regard the generation expansion planning problem as
pressing and assume that the market mechanisms should give the necessary
economic signals to the investors to invest in the construction of new power
plants.
 However, this viewpoint is supported by fewer researchers, since a deeper
analysis and the existing practice show that the market is “shortsighted” and
45
there is a need to foresee the corresponding mechanisms to improve the
investment attractiveness of new power plants and reduce the financial risks
to investors.
2. Generation expansion planning;

 To this end, a lot of different approaches are suggested, one of which

is the so-called Stratum Electricity Market (SEM).
 According to this approach, the electricity market structure is
considered hierarchically in time, including the spot (hourly),
monthly, yearly and long-term markets.
 The long-term market makes it possible to arrange auctions and
46

attract investment in the construction of power plants.

2. Generation expansion planning;
 An important problem is the coordination of generation expansion
since every generating company and every independent investor that
explore the possibility of investing in the construction of power plants,
have their own interests, which should be reconciled taking into
account the general system requirements.
 An independent system operator is considered as the coordinator, and
47

social requirements (the main of which is the reliability of power

supply to consumers) – as the system requirements to be checked by
the operator.
2. Generation expansion planning;

 In other cases, the function of the generation expansion coordinator

is performed by the state (which is often identical to the previous
case, where the system operator is the state property), and the
problem can be viewed as a hierarchical game problem.
 When the power plant expansion is regulated, the coordination can
be performed by the companies. In this case, the problem is
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formulated as a cooperative game.

2. Generation expansion planning;
 Some authors consider the state generation expansion planning as a
means of protection against market risks.
 In a more general case, it is most rational to combine market
mechanisms of power plant expansion with the system of state and
corporate generation expansion planning, which reduces investment
risks.
49

 In this case a special fund is established to hedge independent investors

against financial risks and construct power plants to avoid generating
capacity shortage.
3. Electric network expansion planning;
 cost-based approach
 market approach --which is based on locational, marginal, nodal or
zonal prices and congestion prices
 SEM structure-- the long-term market, similar to generation
expansion, makes it possible to arrange auctions and attract
investment in the construction of transmission lines, and thus the
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expansion of the transmission electric network.

Different models for network expansion planning:
 TEP based on DC model
 TEP based on AC model
Accurate models
 A relaxed ACOPF model based on Tylor series
 TEP based on relaxed AC model
 TEP under uncertainties
 Stochastic reformation 51

 Decomposition based solution

 Scenario generation and clustering
4. Joint generation and transmission expansion planning

 Generally speaking, it is recommended that the generation

expansion and expansion of the electric network should be
coordinated by solving the corresponding system problem.
 The selection of different generation resources can greatly affect
the TEP result. On the other hand, if the transmission investment
52

costs are allocated to the newly connected generator, then it may

affect the decision of the generator resource selection as well.
 Holistic planning
 Integrated resource planning has been actively used for vertically
integrated electric power systems in their centralized expansion
planning.
 Electric power system restructuring and liberalization, electric power
industry division into monopolistic and competitive parts in
accordance with the types of business, and a large number of
53

stakeholders with different interests have made it rather complicated

to use the advantages of the integrated resource planning.
 Holistic planning
 Therefore, with time, this approach has been transformed into a new
one called the holistic planning of electric power systems or the
electric network in a special case.
 “Holistic” means considering an object as a whole, and not just
dealing with particular aspects.
 The electric power systems are comprehensively considered in terms
54

of cost-effectiveness, required reliability, and acceptable

environmental impact/ the social welfare.
 Holistic planning
 The following principles of holistic power system planning are
considered:
 Comparison of alternative strategies for expansion, and
maximizing social benefits of expanding the system as a whole;
 Use of probabilistic reliability criteria to counterbalance the
commonly used deterministic criteria;
55

 Consideration of the entire expanding system: how it is connected

to other electric power systems around it and adjacent systems of
different nature at the local, regional, and global levels;
 Holistic planning
 Assessment of costs and benefits from the standpoint of all the
stakeholders in terms of their share in the used assets and fair cost
and profit sharing among the parties;
 Behavior of individual parties in accord with the global goal of the
system; in other words, each stakeholder should contribute to the
improvement in the efficiency of the entire system, i.e. despite the
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individual goals of the stakeholders, they should make a

contribution to the global goal.
 Holistic planning
 Two aspects of holistic planning are considered: electric network
planning and resource planning.
 At present, the electric network planning involves great difficulties.
 The substantial uncertainty about the load forecast, placement of
generating capacities, regulatory decisions, construction
opportunities, etc. and a large number of stakeholders engaged in
57

expansion planning necessitate the development of new approaches

and methods for creating future flexible electric power systems which
expand in an efficient manner.
 Holistic planning
 The electric network planning is impossible to perform holistically
without consideration of resource planning, decisions on electricity
consumption, and environmental constraints.
 The placement of new generating capacities can considerably affect
the formation of the electric network.
 Social welfare implies making decisions optimal from a market
58

viewpoint, under various alternatives, in accordance with the concept

"Unity in Diversity”, which is viewed as a way of reconciling
individual decisions to the benefit of the society.
 Holistic planning
 The holistic resource planning under the conditions, where
centralized expansion planning does not work and the free market
mechanisms turn out to be ineffective, should be based on the above
mentioned concept “Unity in Diversity”, where individual decisions
made by the stakeholders should agree with social welfare and goals
of the society.
59

 The mechanisms for implementing such a concept should be

developed by the government or by a community of consumers.
 Holistic planning
 One of the principles can be based on the inclusion of environmental
costs, social needs, etc. in economic and financial criteria.
 In general. the holistic power system planning gives only the main ideas
of the new concept of expansion planning under electric power industry
restructuring and liberalization.
 The ideas are aimed at reconciling the individual goals of stakeholders
involved in the power system planning and the goals and benefits of the
60

society as a whole.
 This promising approach needs further analysis and elaboration.
 C. Expansion planning
Another approach for network expansion planning:
 Load flow-based technique
 Market based technique
 Adequacy based technique

61
 C. Expansion planning
Algorithms to solve expansion planning problems:
 Linear programing
 Nonlinear programming
 Mixed integer linear programming
 Bi-level programming model
 Interior point method 62

 Heuristic algorithms/AI
 etc…
 C. Expansion planning

63

Fig. Next-generation transmission expansion planning process

 C. Expansion planning
Available Software Tools for TEP and GEP:
 In order to perform a systematic planning study, these tools
perform planning studies including security-constrained
economic dispatch (SCED), security-constrained unit
commitment (SCUC), transmission expansion planning (TEP) as
64
well as generation expansion planning (GEP).
 C. Expansion planning
Tools name SCED SCUC TEP GEP
Table 1:
a
GridView Software tools
PROMOD
a for planning
b studies
UPLAN
a
PSR Net-Plan
a
PLEXOS
65

a The DC power flow model is used in economic dispatch

b The DC or the AC power flow model is used in economic dispatch
 C. Expansion planning
Wien Automatic System Planning Package(WASP):
 Is computer programme package which provides way of estimating the most
economic schedule for adding new generating capacity to an electric power
system over the medium and long term.
 It is the second generation of an earlier power system planning programme
developed by and for the Tennessee Valley Authority in the USA.
 The package is designed to find the "optimum" power system expansion plan
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within established constraints.

 The WASP package consists of the following seven modular programmes:
 C. Expansion planning
1. A program to describe the forecast peak loads and load duration
curves for the system (LOADSY).
2. A program to describe the existing power system and all future
additions and retirements which are firmly scheduled (FIXSYS).
3. A program to describe the candidate plants which might be used to
expand the power system (VARSYS). 67

4. A program to generate alternative expansion configurations

(CONGEN).
 C. Expansion planning
5. A program to determine whether a particular configuration has
been simulated and, if not, to simulate operation with that
configuration (MERSIM).
6. A program to determine the optimum schedule for adding new
units to the system over the time period of interest (DYNPRO).
7. A program to summarize the input data, results of the study and the
68

cash flow requirements of the optimum solution (REPROBAT).

Example 1: The bilevel optimization model of the GEP problem which is
formulated as follows, where the upper level decision variable 𝑥 represents
generation investment and retirement decisions 𝑥𝑔,𝑏,𝑦 ∀𝑔, 𝑏, 𝑦 and the lower level
decision variable 𝑝 represent both dispatch decisions 𝑝𝑔,𝑏,𝑡,𝑦 ∀𝑔, 𝑏, 𝑡, 𝑦 and
𝐿𝑀𝑃
locational marginal prices 𝑝𝑏,𝑡,𝑦 ∀𝑏, 𝑡, 𝑦
𝑚𝑎𝑥
𝑥, 𝑝 𝑓 𝐺𝐸𝑃 (𝑥, 𝑝) (1)

𝑠. 𝑡. 𝐴1 𝑥 ≤ 𝑏1 69 (2) Upper level Con.

𝑥 𝑏𝑖𝑛𝑎𝑟𝑦 . (3)
Lower level Con
𝑝 ∈ 𝑎𝑟𝑔𝑚𝑖𝑛 𝑏1 𝑝: 𝐴2 𝑥 + 𝐵2 𝑝 ≤ 𝑏2 , 𝑝 ≥ 0 . (4)
The upper level objective function 𝑓 𝐺𝐸𝑃 (𝑥, 𝑝) is to maximize the profit of
generation companies, which can be estimated as

The first term in the objective function is the estimated revenue from selling
70

power generation at the locational marginal prices. The second term in the
objective function is the O&M cost for existing and new generators, and the third
term is the investment cost for new generators.
 All future cost terms are discounted to the current year to calculate the net
present value.
 All fixed and variable investment costs are amortized so that investments
towards the end of planning horizon would not be disincentivized, since only
part of the investment cost appropriated for the planning horizon was
calculated to offset the benefit of the investment.

71

 The upper level constraints (2) and (3) are defined as follows:
72
 Here, constraints (6) and (7) allow the retirement of existing generators and
investment of new generators;
 Constraint (8) imposes a renewable portfolio standard type of requirement on
the minimal percentage of generation capacity being renewable;
 Constraint (9) imposes a generation adequacy requirement, where the total
generation capacity for each year must exceed 120% of predicted peak
demand; and
73

 Constraint (10) is the definition of binary decision variables.

 Constraint (4) defines the lower level problem, which takes generation
investment and retirement decisions from the upper level as input, and solves
the optimal power flow problem to determine power dispatches and locational
marginal prices throughout the planning horizon. This lower level problem
can be defined as follows, which needs to be solved for all t ∈ 𝒯 𝑎𝑛𝑑 𝑦 ∈ 𝒴 .

74
 The lower level objective function (11) is to minimize the production cost and
75

load shedding cost.

 Constraint (12) enforces Kirchhoff’s current law that requires nodal balance of
power generation, in flow, out flow, demand, and load shedding;
 Constraint (13) defines the lower and upper bounds of load shedding;
 Constraint (14) enforces Kirchhoff’s voltage law, which computes power
flows through transmission lines based on voltage angles and susceptance of
the power network;
 Constraint (15) defines the bounds of voltage angles;
 Constraint (16) limits the power flow within transmission capacity; and
 Constraint (17) limits the power production within existing generators’
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capacity, which depends on generation investment and retirement decisions.

 C. Expansion planning
Example 2: The TEP model based on the losses DC power flow model has the
following form:
min 𝑐𝑘 𝑧𝑘 (1)
subject to
(2)

(3)
(4)
77

(5)
(6)
(7)
 C. Expansion planning
 where, the objective function (1) is to minimize the total investment
cost.
 The nodal balance equation is shown in (2), where the net power
injection at a bus is equal to the total loads connected to the bus.
 As shown in (3) and (4) respectively, the active power flows for
existing lines are determined by the product of the line susceptance bk
78

and the voltage phase angle difference θk, while for prospective lines,
the big-M method needs to be applied to avoid the presence of
nonlinear terms.
 C. Expansion planning
 If a prospective line is selected, i.e., zk is 1, then (4) is forced to be an equality
constraint as (3), otherwise, zk is 0; the positive number Mk guarantees that (4)
is not binding.
 Constraints (5) and (6) limit the active power on existing lines and prospective
lines respectively. If a prospective line is selected, then (6) is the same as (5),
otherwise, the power flow is forced to be zero.
 The generator output limit is enforced by (7). 79
 Assignment

 Survey/review of the existing expansion planning methods of Ethiopian

Electric Power Corporation.
 Getting back to about 2007/8

Submission deadline: Feb.18/2024 80