Evaluation of short recovery period investments on utility planning

Least cost planning for expanding public power systems plays an important role in achieving economic benefits while preserving technological necessities in generation expansion decisions. Many methods of least cost planning have been developed and many computer packages, some of them very sophisticated, have emerged over the years. Investments traditionally follow an integrated development program prepared by a planning agency, usually located in a power utility. The plan identifies the capacity increments to be added over the planning horizon which, together with the optimal utilization of existing facilities, will meet the demand for power at minimum expected cost. In this paper, the effect of the short recovery period of private investment on least cost generation system extension is analyzed as it is the most often recurring example of this type of problem. A trade-off method for generation system expansion planning which gives consideration to both the least cost strategy and the short recovery period of private investment is presented