¹University of Minnesota, Minneapolis, MN, USA

Correspondence: E Bustamante-Cedeño, Industrial and Systems Engineering Division, Mechanical Engineering Department, University of Minnesota, 111 Church Street, S.E., Minneapolis, MN 55455, USA. E-mail: rey@me.umn.edu

Received October 2006; Accepted July 2007; Published online 12 September 2007.

Abstract

After deregulation of the Power sector, uncertainty has increased considerably. Vertically integrated utilities were unbundled into independent generation, transmission and distribution companies. Transmission network expansion planning (TNEP) is now performed independent from generation planning. In this environment TNEP must include uncertainties of the generation sector as well as its own. Uncertainty in generation costs affecting optimal dispatch and uncertainty in demand loads are captured through composite scenarios. Probabilities are assigned to different scenarios. The effects of these uncertainties are transferred to the objective function in terms of total costs, which include: generation (dispatch), transmission expansion and load curtailment costs. Two formulations are presented: stochastic and minimum regret. The stochastic formulation seeks a design with minimum expected cost. The minimum regret formulation seeks a design with robust performance in terms of variance of the operational costs. Results for a test problem and a potential application to a real system are presented.