An integrated planning model in centralized power systems

Francisco López-Ramos, Stefano Nasini and Mohamed H. Sayed

European Journal of Operational Research, 2020, vol. 287, issue 1, 361-377

Abstract: In the context of centralized electricity markets, we propose an integrated planning model for power pricing and network expansion, which endogenizes the scaling costs from power losses. While the substitutability pattern between pricing and expansion has been overlooked in the power flow optimization literature, this becomes particularly relevant in centralized electricity markets (where the headquarters are enabled to take decisions over a wide range of operational factors). In this paper, we tailor an optimization model and solution approach, that can be effectively applied to large-scale instances of centralized power systems. Specifically, we develop bounds to the optimal operator profit and use them within a mixed-integer linear programming problem, derived from the linearization of an extended power flow model. On the empirical side, we conduct computational tests on a comprehensive power system data set from the Saudi Electricity Company, uncovering the value of the proposed integrated planning. The results reveal the complex substitutability patterns which appear when deciding about integrated operational factors in centralized power systems and support the correctness and efficiency of the proposed resolution mechanism.

Keywords: OR in Energy; Centralized electricity markets; Integrated pricing and expansion; Power network flow; Linearization-approximation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221720304173
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:287:y:2020:i:1:p:361-377

DOI: 10.1016/j.ejor.2020.05.006

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().