Combined Generation and Transmission Capacity Market Model for Dispersed Systems

Abstract

The paper develops a capacity market model for dispersed electric power systems (EPS) characterized by long distances and low transfer capabilities of transmission lines. The model includes discrete optimization of an optimal generation set considering network limitations. Potential competition and generation development are integrated into the model. Forming investment price signals is discussed as far as the capacity price is not calculated by the discrete market model. The developed model provides nodal generation investment signals depending on existing power plants, network transfer capabilities and possible generation projects. Additionally network development is considered from the viewpoint of total fixed costs of the power plants included into the optimal generation set. An example of a simple abstract 14-node EPS is used to illustrate how the model works.