New market power driven multistage transmission expansion strategy in power markets

In this paper a new market power driven transmission expansion planning strategy is presented in deregulated power market environment. A Lerner index is utilized as market power driving signal during the process of transmission network expansion. To compromise between the network expansion revenues and costs, two multistage transmission expansion models managed by different transmission planners are constructed to determine optimal expansion schemes, one is the minimization of investment cost and congestion cost under the level of Lerner index constraint subject to a nonprofit transmission administrator, and the other is managed by a for-profit transmission company to maximize the allowed investment return not exceeding an "acceptable" level of Lerner index limit. The algorithm has been developed to solve the complete planning process to provide optimal expansion schemes for the planning horizon under a proper double-sided auction market pattern. These two approaches are compared on the modified IEEE 24-bus example system. And the test results demonstrate that the proposed methods are very suitable and realistic for solving the multistage transmission expansion planning problem under electrical market environment.