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Generation planning including distributed generators under uncertainty of demand growth
Author(s) -
Muroaka Yukari,
Oyama Tsutomu
Publication year - 2004
Publication title -
electrical engineering in japan
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.136
H-Index - 28
eISSN - 1520-6416
pISSN - 0424-7760
DOI - 10.1002/eej.10276
Subject(s) - generator (circuit theory) , computer science , monte carlo method , on demand , demand response , scale (ratio) , brownian motion , demand curve , mathematical optimization , demand forecasting , operations research , power (physics) , economics , electricity , engineering , microeconomics , electrical engineering , mathematics , statistics , physics , multimedia , quantum mechanics
This paper addresses the problem of generation planning in the competitive power market with uncertainty of demand growth. The distributed generator (DG) is given attention against a large‐scale generator to correspond to uncertain demand growth. Optimization consists of minimizing the average cost and hedging risk over the scenario trees of demand growth. At first, based on the idea of a Real Option, Dynamic Programming using the utility function is applied to generation planning. Utility functions can model investor's risk‐return profile. The decisions in the first stage indicate that they are influenced by the type of utility functions and demand growth scenarios, and data of generators. Next, a Monte Carlo simulation is applied to a Brownian motion model of demand growth. This model can increase the possible number of demand levels. With this simulation, the case that the distributed generator has an advantage over the large‐scale generator is quantitatively discussed. © 2003 Wiley Periodicals, Inc. Electr Eng Jpn, 146(3): 17–25, 2004; Published online in Wiley InterScience ( www.interscience.wiley.com ). DOI 10.1002/eej.10276