Electric power capacity planning under uncertain conditions

A dynamic model for electric power capacity expansion planning under uncertain conditions has been developed. The model determines an expansion plan which gives a minimum for the expected total costs in electricity production. Decision sequences are presented in the form of decision trees. Uncertain factors are defined in the form of discrete probability distributions. Certain constraints in the optimization problem are relaxed through Lagrange multipliers and the resulting problem is solved using a decomposition technique. The application of the model to analyse alternative construction policies for Finnish power capacity under uncertain conditions has been discussed