Capacity Expansion Model for Hydrothermal Power Systems

Abstract

This paper describes a computer model that can be used to analyze long‐term capacity expansion strategies for power generation systems consisting of hydrothermal plants and transmission networks. The objective is to determine the optimum capacity expansion schedule that minimizes the present worth of capacity cost and operating cost, subject to meeting peak power demand and energy demand. The problem is formulated as a large scale mixed‐integer program and solved by Lagrangean relaxation decomposing into two‐level hierarchy. At the top level is the capacity problem, where the capacity expansion decisions are made. At the second level is the operating problem, where the operational decisions on power generation and transmission are made. The feedback information is conveyed by the Lagrange multiplier.