Generation Expansion Planning by MILP considering mid-term scheduling decisions

This paper presents a mixed-integer linear programming model for the solution of the centralized Generation Expansion Planning (GEP) problem. The GEP objective is the minimization of the total present value of investment, operating and unserved energy costs net the remaining value of the new units at the end of the planning horizon. Environmental considerations are modeled through the incorporation of the cost of purchasing emission allowances in the units' operating costs and the inclusion of annual renewable quota constraints and penalties. A monthly time-step is employed, allowing mid-term scheduling decisions, such as unit maintenance scheduling and reservoir management, to be taken along with investment decisions within the framework of a single long-term optimization problem. The proposed model is evaluated using a real (Greek) power system. Sensitivity analysis is performed for the illustration of the effect of demand, fuel prices and CO2 prices uncertainties on the planning decisions. (C) 2011 Elsevier B.V. All rights reserved.