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A framework for transmission planning in a deregulated power market environment is discussed. The level of congestion in the network is utilized as the driving signal for the need of network expansion. A compromise between the congestion cost and the investment cost is used to determine the optimal expansion scheme. The long-term network expansion problem is formed as the decoupled combination of: 1) the master problem (minimization of investment costs subject to investment constraints and the Benders cuts generated by the operational problem (power pool) and 2) the operational problem, whose solution provides congestion details and associated multipliers. A proper power-pool model is developed and solved for congestion cost, congestion revenue, and transmission shadow prices. Linear programming is utilized to solve the investment subproblem, while the quadratic programming technique has been used to solve the operational problem. The algorithm has been developed for the complete planning process, which provides the expansion schemes for the planning horizon. The technique has been applied to illustrate the network planning study for a modified IEEE 24-bus test system.
Shrestha et al. (Sun,) studied this question.