Security-constrained resource planning in electricity markets

We propose a security-based competitive generation resource planning model in electricity markets. The objective of the model is to introduce the impact of transmission security in a multi-GENCO generation resource planning. The proposed approach is based on effective decomposition and coordination strategies. Lagrangian relaxation and Benders decomposition are applied to decompose the original planning problem into tractable optimization subproblems. Locational price signal and security signal are defined for the simulation of competition among GENCOs and the coordination of security between GENCOs and the regulatory body (ISO). The numerical examples exhibit the effectiveness of the proposed generation planning model in electricity markets.