Developing concurrent investment plans for power generation and transmission

Decisions on electric power generation and transmission investments may have crucial effects on the development of industrial and residential areas. Decisions made on the infrastructure should have economically beneficial consequences for producers and consumers. The aim of this paper is to propose a model that considers transmission and generation investments simultaneously. The proposed model fills in the gap between models for developing long-term power generation policies and instantaneous power flow models. Unlike other investment models, it explicitly takes the high voltage transmission network into account and the selection of new generation plants located on the interconnected network is made in a more realistic manner considering transmission bottlenecks. The problem subsumes the capacitated network location problem and the network design problem, the former being related to decisions on generation expansion and the latter to decisions on transmission network expansion. The integrated model becomes NP in both feasibility and optimality, because of the sub-problems it contains. Here, a practical procedure is proposed to achieve overall feasibility and also to improve investment decisions when the solution is feasible. The model is tested on the dense interconnected network of an industrialized region in Turkey. The implementation shows how future infeasibilities in the transmission network are highlighted by the model and how generation investment decisions are affected by network expansion alternatives.