 Capacity planning of renewable energy systems using stochastic dual dynamic programmingJ. Hole, A.B. Philpott and O. Dowson European Journal of Operational Research, 2025, vol. 322, issue 2, 573-588 Abstract: We present a capacity expansion model for deciding the new electricity generation and transmission capacity to complement an existing hydroelectric reservoir system. The objective is to meet a forecast demand at least expected cost, namely the capital cost of the investment plus the expected discounted operating cost of the system. The optimal operating policy for any level of capacity investment can be computed using stochastic dual dynamic programming. We show how to combine a multistage stochastic operational model of the hydro system with a capacity expansion model to create a single model that can be solved by existing open-source solvers for multistage stochastic programs without the need for customized decomposition algorithms. We illustrate our method by applying it to a model of the New Zealand electricity system and comparing the solutions obtained with those found in a previous study. Keywords: OR in energy; Stochastic dual dynamic programming; Capacity expansion; Multistage stochastic programming; Policy graph (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:322:y:2025:i:2:p:573-588 DOI: 10.1016/j.ejor.2024.12.031 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 |
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