MULTIPERIOD OPTIMAL POWER PLANT MIX UNDER DEMAND UNCERTAINTY

This paper is concerned with the thermal-based electric utility capacity expansion planning under demand uncertainty. The demand uncertainty is typically represented as a set of likely load duration curves (LDCs) with respective probabilities. Conventional scenario approaches prepare respective capacity expansion plans - one for each load curve - and synthesize these somehow into a single plan. This paper presents a simple yet justifiable method which combines multiple plans into a single implementable plan guaranteeing the minimum expected total cost. A "horizontal" expected load curve is the key concept m this method We illustrate this using Korea's data in a realistic multi-period optimal mix problem. It turns out that the recommended baseload capacity expansion (e.g., through construction of nuclear plants) follows closely that of the low-demand case, suggesting the need for conservative commitment to costly baseload plants in the presence of demand uncertainty.