Bi-Level Game Approaches for Coordination of Generation and Transmission Expansion Planning Within a Market Environment

The main purpose of this paper is to develop methodologies for simultaneous generation and transmission expansion planning problem of power networks while investigating interactions between these two important sections. In the proposed methodologies, a transmission operator (TO) operating under different incentives decides about investment in transmission network while anticipating the outcome of a purely competitive electricity market where several rival generation firms complete with each other to determine operating level of their generators, amount of their sales and amount of their investment in generation capacity. The proposed methodologies rely on bi-level programming models whose upper level model represent the problem of investment in transmission by TO and the lower level problems represent market outcomes obtained from clearing the market. These bi-level models are reduced to mixed-integer linear and nonlinear programming using the duality theory and Karush-Kuhn-Tucker (KKT) optimality conditions. The results of the proposed models are analyzed and compared using two illustrative examples.