A New Method for Power Generation Planning and Problems of Uncertainty

Abstract

This paper presents a new method for power generation planning which takes into account uncertainties of various system parameters as a part of the criterion function. The criterion function involves both the expected values of total system costs and the cost variances of different power plants.
Previously the authors proposed to evaluate these cost variances from the existing power system plans in the form of the solutions to the inverse optimization problem and then applied this procedure to the planning of power system in Japan. However because of the correlation between fuel and facility costs, the costs variances couldn't be determined as specific values.
To overcome this difficulty here, the authors now introduce hydro-power plants into the model as the so-called non-risky elements and focus on the expenditure shares rather than the plant capacity shares, which enables us to obtain more reasonable results.
This improved methodology is applied and the derived cost variances are shown. Further, using the resultant cost variances the authors make Pareto-optimal power generation plans and also demonstrate the robustness of the method to price fluctuations.