Least-cost energy strategies for power system expansion

This paper describes a theoretical framework and practical procedure for identifying least-cost energy strategies for power system expansion. Under such a strategy, the socially optimal decision is defined by a least-cost combination of not only conventional supply-side generating options, but also conservation and renewable resource options — such that the cost of providing an incremental unit of electricity from all resources is the same. In addition, under a least-cost energy strategy, the reliability of electricity supply is determined on an economically optimal basis. Results of an actual case study of the Pacific Northwest region of the USA are presented.