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Promoting the Investment on IPPs for Optimal Grid Planning

TOR, Osman Bulent
Güven, Ali Nezih
Shahidehpour, Mohammad
This paper presents a transmission expansion planning (TEP) model which coordinates investment decisions in monopolistic transmission and decentralized generator sectors. The proposed planning approach gauges transmission congestion and security constraints with respect to transmission investments while promoting investments on independent power produces (IPPs) through incentive payments. The paper includes discussions on incentive mechanisms and prioritization among qualified IPPs for several planning scenarios. Such incentives might be necessary to trigger investments on IPPs earlier than those projected by the decentralized generation system, when the power system security is threatened. The proposed planning approach would optimize the sum of transmission investments, incentive payments to IPPs, and congestion costs along the planning horizon. The case studies illustrate how the proposed planning algorithm could be utilized in order to determine incentive payments to candidate generators when necessary, and prioritize such incentives among multiple IPP candidates.