Production Costing and Planning for Multi-Area and Distributed Power Systems

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Hobbs 9521603 Existing planning tools do not calculate expected production costs while considering transmission limitations. Further, present frameworks for comparing distributed resources against transmission and distribution (T&D) investments and centralized resources lack a theoretical basis for the appropriate development and use of marginal cost information. We propose the following research efforts to fill those gaps: * Development and demonstration of methods for assessing the effect of transmission limits upon expected costs. The methods would exploit a multiarea probabilistic production costing framework incorporating DC and AC network representations. Existing probabilistic multiarea methods, aside from inefficient Monte Carlo approaches, do not include DC or AC flow models. This work would be of benefit to utilities by allowing them to assess the long run implications of resources and transmission decisions for production costs while rigorously considering transmission limitations and the entire range of possible load and equipment states. It could also benefit non-utility providers of electric power, large power consumers, and regulators by providing them a means of better understanding the spatial cost structure of the bulk power market. * Creation of a theoretically defensible yet practical framework for using such information for evaluating resources and transactions. Decomposition methods would be used to develop theoretically optimal approaches for coordinating models for generation planning, bulk power system operation, and transmission and distribution planning. Guidelines and procedures would be defined for theoretically correct calculation of marginal costs and coordination of models. This effort would be especially valuable to the many electric utilities who are beginning to evaluate the merits of dist ributed versus centralized generation and demand-side resources. Some utilities are presently testing ad hoc procedures involving coordination of distribution planning methods with bulk power planning and power flow models. ****