An approach to the explicit consideration of unreliability costs in transmission expansion planning

This paper proposes a new methodology to explicitly consider unreliability costs in a multi‐stage transmission expansion planning. Starting from a reference plan, alternative expansion plans are derived based on postponement/anticipation of circuit implementations. These plans are then ranked by using an economic index of merit (EIM) and the associated Pareto‐optimal set is obtained through cost/benefit (trade‐off) analyses. The cost/benefit is related to the variation of investments and operational costs of each alternative transmission plan. Besides the usual operational costs (active power losses, fuels, etc.) the unreliability costs, due to random failures in the system, are also considered as operational costs. Therefore, reliability evaluations are carried out for all transmission expansion plans (TEPs) in order to compute reliability indices, such as the Expect Energy not Supplied and Loss of Load Cost (LOLC). To reduce the computational effort, pruning techniques are used to limit the number of possible TEPs. The proposed approach is applied to a configuration of the Brazilian North‐eastern system, considering a planning horizon of 10 years, to identify TEPs that are more balanced in terms of investment and reliability. Copyright © 2007 John Wiley & Sons, Ltd.