Optimal planning strategy of energy internet zones based on risk adjusted return on capital

•A planning strategy for energy internet zones is proposed considering uncertainties.•Conditional Value at Risk is adopted to determine the economic capital reserved.•Risk Adjusted Return on Capital defines the tradeoff between profit and risk. With the spread of energy internet concept, energy internet zones (EIZs) have been widely constructed and operated. EIZs supply thermal power, cooling power and some other kinds of energy to customers in addition to electricity. In EIZs, all kinds of energy are coupled together by energy converters like electric heaters. The operation of thermal power system can influence the electricity system by the electricity consumption for heating. This paper discussed a risk-averse planning problem for EIZs considering the coupling relationships of electricity, thermal power and cooling power. Because the uncertainties of load demands, renewable power and electricity prices are inevitable and have great effects on the EIZs’ economy, Conditional Value-at-Risk (CVaR) and Risk Adjusted Return on Capital (RAROC) have been introduced to the planning strategy for risk management. According to the CVaR, EIZs can determine the economic capital reserved to withstand the huge losses in extreme events. The RAROC defines the tradeoff relationships between profit and risk with economic meanings. The proposed planning model maximizes the expected annual profits with the RAROC threshold constraint for risk management. An EIZ in Shanghai has been adopted as case study to prove the validity of the proposed models.