A modified electric generation expansion analysis system model with avoided cost and the optimization of generation expansion plan

Public utility industries including the electric utility industry are facing a new stream of privatization, competition with the private sector and deregulation. The necessity to solve now and in the future power supply and demand problems has been increasing through the sophisticated generation expansion plan (GEP) approach considering not only KEPCO's supply-side resources but also outside resources such as non-utility generation (NUG), demand-side management (DSM). Under the environmental situation in the current electric utility industry, a new approach is needed to acquire multiple resources competitively. This study presents the development of a modified electric generation expansion analysis system (EGEAS) model with avoided cost based on the existing EGEAS model, which is a dynamic program to develop an optimal generation expansion plan for the electric utility. We are trying to find optimal GEP in Korea's case using our modified model, and observe the difference for the level of reliabilities such as the reserve margin (RM), loss of load probability (LOLP) and expected unserved energy percent (EUEP) between the existing EGEAS model and our model. In addition, we are trying to calculate avoided cost for NUG resources which is a criterion to evaluate them, and test possibility of connection calculation of avoided cost with GEP implementation using our modified model. The results of our case study are as follows. First, we were able to find that the generation expansion plan and reliability measures were largely influenced by capacity size and loading status of NUG resources. Second, we were able to find that avoided costs, which are criteria to evaluate NUG resources, could be calculated by using our modified EGEAS model with avoided cost. We also note that avoided costs were calculated by our model in connection with generation expansion plans.