Keywords: generation expansion planning, GEP, profit maximisation, uncertainty, electricity markets, modelling
GENCOs multiperiod expansion model in a competitive electricity market
Over the past two decades, several countries have restructured their electricity industry by significantly reducing the government's role in the ownership and management of energy sector. The generation sector was the first activity of the vertically integrated industry to be open for the competition and therefore, it presents the highest level of competitiveness and experience. In the new restructured electricity markets, the objective of each generation company (GENCO) is to maximise its total expected profit over a planning horizon while following the gridcode and system operators' directive for the safe operation of the power system. In the expansion plan of generating companies, the problem is to be reformulated incorporating several uncertainty factors such as demand growth, the volatility of market prices for electricity and fuels, delay in project completion, financial constraints, etc. In this paper, a longterm multiperiod expansion model for a generation company operating in the deregulated electricity industry is presented. The effectiveness of the proposed approach is demonstrated on numerical examples.