Resource planning in electricity markets

Two observations are made based on these results. First, from the economics viewpoint, the GENCO ought to make necessary investments for meeting the future demand and securing its financial return over the 15-year horizon. Second, from the reliability viewpoint, certain units must be added to enhance the system reliability, which is the most important aspect of the power system operation. The case studies in general present the effectiveness of the proposed planning approach. The proposed method considers various options such as adding a new unit, retrofitting, or leasing an existing unit for satisfying the prevailing constraints. Meanwhile, the expected profit over the planning horizon provides the planner with additional information on the investment return for certain market price forecasts, which is helpful for the investment decision-making. The salient feature of the proposed method is that it can model GENCOs as independent agents, which could compete in a volatile market for maximizing their profit, while the system security and reliability is guaranteed by the ISO. The proposed plan can be viewed as a trade-off between economy and reliability