A Negotiation Mechanism for Incentivizing Transmission Expansion Planning Considering Generation Expansion Planning Equilibrium
Whether to achieve efficient transmission expansion planning is highly dependent on the incentive mechanism, while the non-negligible coordination between transmission expansion planning and generation expansion planning induces more challenges to the problem. This paper proposes a negotiation mechanism for incentivizing transmission expansion planning in which both the generation companies and load-serving entities are able to proactively participate in deciding on the transmission investments via negotiating directly with the transmission company who is in charge of transmission expansion planning. The negotiation process is modelled based on the Nash bargaining theory while the coordination between transmission investment and generation investment is addressed with a bi-level model. An iterative approach is employed to solve the bi-level model, after transforming equivalently the upper-level problem into a tractable one and devising a modified proximal message passing algorithm to seek the generation investment equilibrium in the lower-level problem in a decentralized manner. The feasibility and efficiency of the proposed mechanism and methodology are further justified with an IEEE 24-bus test system. The results show the proposed negotiation mechanism could guarantee revenue sufficiency and achieve the social-welfare-maximizing transmission investment, while simultaneously preserving the privacy on key information of market players, coordinating the benefits conveyed to the transmission network investor and to the transmission network users as well as resulting in a reasonable allocation of transmission expansion planning costs and risks among market players. Moreover, the market players’ willingness to proactively participate in deciding on the transmission investment could be recognized with assuring increased utilities for all participants, while the non-cooperative feature of the generation expansion planning problem with multiple generation companies could also be captured with efficiently obtaining the equilibrium results
Year of publication: |
[2023]
|
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Authors: | Guo, Hui ; Xiao, Yunpeng ; Pinson, Pierre ; Wang, Xiuli ; Wang, Xifan |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
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