Capacity Expansion in Deregulated Power Markets
Research Abstract
Power generators are faced with the challenge of determining where, when and what type of power plant to build to satisfy an increasing demand. The potential implementation of a CO2 cap-and-trade program is likely to compound this challenge. In fact, if such a program is to achieve its goals, there will need to be a shift from current dominant generation technologies such as coal and natural gas to cleaner ones such as nuclear or renewable fuels. In this research, we develop a model to obtain capacity expansion plans under di erent CO2 cap-and-trade scenarios. We focus on restructured markets in which capacity expansion is driven by market competition as opposed to coordinated expansion. The capacity expansion problem is modeled as a matrix game whose payoffs are computed by considering the profit that each expansion plan generates in the CO2 emissions and electricity markets. A real-life application to the Illinois Electricity Market is presented.
Figure: 3-Tier Capacity Expansion Model
Publications
Conference Presentations
- Rocha, P., Nanduri, V., and Das, T. K. Generation Expansion in Restructured Electricity Markets under a CO2 Cap-and-Trade Program. IIE Annual Conference 2009, Miami, FL.
- Nanduri, V., Rocha, P. and Das, T. K. A Decision Support Tool for Generation Capacity Investments in Restructured
Markets. INFORMS Annual Meeting 2008, Washington, DC.
- Nanduri, V. and Das, T. K. A Three-Tier Game Theoretic Model for
Multi-Period Multi-Generator Capacity Expansion in Restructured
Markets. INFORMS Annual Meeting 2007, Seattle, WA.
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