Advanced DP based method for power expansion planning in the deregulated market

In an open generation market, the utility prefers to introduce IPPs rather than building new generators by itself if the participation of IPPs can maximise its profits. At the same time, the IPPs also want to maximize their own profits and bid against each other for participating in the generation market. This paper discusses the bidding conditions of IPPs based on their scenario analyses, and proposes a solution method for the utility to obtain the optimal generation expansion planning while considering the profits of IPPs from the viewpoint of a utility. The supply reliability and the environmental problem (CO₂ emission) are considered in this paper. Based on a dynamic programming (DP) approach, the feasibility of the proposed approach is demonstrated in a test power system, and an optimal generation expansion planning of utility in consideration of impact of IPPs is obtained