Optimization methods for electric utility resource planning

Electric utility resource planning is the selection of power generation and energy efficiency (conservation) resources to meet customer demands for electricity over a multi-decade time horizon. Because investments in these resources are large, electric utilities became one of the earliest users of optimization methods. The industry is now an eager consumer of the operations researcher's wares, and is a continual source of stimulating problems. The first purpose of this review is to examine how the needs of utility planners for optimization models have changed in response to environmental concerns, increased competition, and growing uncertainty. The second purpose is to survey the range of models that have developed in response to those needs, and to identify gaps requiring further research.