An Analytical Model for Generation Expansion Planning in Competitive Environment based on Dynamic Balance between Energy Supply and Demand

Generation expansion planning (GEP) in the competitive environment of electric industry is an important and complex problem, which is normally performed for about the next 10-30 years horizon. This problem has presented a challenge for both market managers and suppliers regarding the safe provision of loads and acquiring minimum profit for suppliers over the planning interval. In this paper, the aim is to establish dynamic balance between energy supply and demand by adjustment and optimal design of GEP over the horizon of study such that the expected profit to be provided for generating plants. To do so, in this paper the uncertainties of demand and system capacity have been modelled through two stochastic processes. In addition, the market price dynamics and their mutual effects on the GEP are considered. Based on this model, the intention of private sectors and their influences on the obtained results are observable. This nonlinear dynamic problem is solved using an optimization method based on genetic algorithm. The efficiency and ability of the proposed method is examined on a test power system.