A market-based generation expansion planning in deregulated environment based on distributed generations development

This paper proposes a new comprehensive solution for Generation Expansion Planning in deregulated environment based on developing distributed generations and environmental considerations. In this method, Generation Companies (GENCOs) will make their decisions based on their technical/economical expenses through a dynamic game in a competitive market until the end of planning horizon. In this game, the GENCOs manage their amount of investment by applying the Internal Rate of Return index. In this solution, the independent system operator (ISO) presents incentives for distributed generation companies in a new progressive method for supporting renewable resources besides developing distributed generation implementations. Also, the ISO presents a long-term incentive contracts for wind generation companies due to its wind generation development policy. Existence of effective incentives/penalties by the ISO such as penalty for delay in construction and delivery of power plant, penalty for emissions and also incentive treatment for installing high-technology solutions for emissions reduction, leads to gain the best applicable strategy for the generation expansion planning issue. In order to ensure the possessing reliability of system in a satisfactory level, the paper has used reliability indices such as ENS and EIR for assessing the presented strategies through the Monte-Carlo Simulation technique.