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An approach to modeling electric utility capacity expansion planning

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  • Frederic H. Murphy
  • Howard J. Weiss

Abstract

This article describes an algorithm for solving the static electric utility capacity expansion problem. The advantages of this algorithm are twofold. First, it is simpler and yet more efficient than previous algorithms for the same problem. Second, by making simplifying but realistic assumptions on plant sizes it is possible to use this algorithm for the case where one does not allow fractional plant additions. While the model has n variables, it has a clear two‐dimensional geometric representation for understanding its properties, developing an algorithm, and interpreting the optimal solution. This algorithm has been implemented in the Intermediate Future Forecasting (IFFS) capacity expansion model at the Department of Energy.

Suggested Citation

  • Frederic H. Murphy & Howard J. Weiss, 1990. "An approach to modeling electric utility capacity expansion planning," Naval Research Logistics (NRL), John Wiley & Sons, vol. 37(6), pages 827-845, December.
    • Handle: RePEc:wly:navres:v:37:y:1990:i:6:p:827-845
    DOI: 10.1002/1520-6750(199012)37:63.0.CO;2-6
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    References listed on IDEAS

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    1. P. Massé & R. Gibrat, 1957. "Application of Linear Programming to Investments in the Electric Power Industry," Management Science, INFORMS, vol. 3(2), pages 149-166, January.
    2. Paul L. Joskow, 1987. "Productivity Growth and Technical Change in the Generation of Electricity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 17-38.
    3. Campbell, KW & Murphy, FH & Soyster, AL, 1982. "Estimating operational costs in an electric utility," Omega, Elsevier, vol. 10(4), pages 373-382.
    4. F. Noonan & R. J. Giglio, 1977. "Planning Electric Power Generation: A Nonlinear Mixed Integer Model Employing Benders Decomposition," Management Science, INFORMS, vol. 23(9), pages 946-956, May.
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    1. Wang, Earl-Juei & Jaraiedi, Majid & Torries, Thomas F., 1996. "Modelling long-run cost minimization and environmental provisions for utility expansion," Energy Economics, Elsevier, vol. 18(1-2), pages 49-68, April.
    2. Güner, Yusuf Emre, 2018. "The improved screening curve method regarding existing units," European Journal of Operational Research, Elsevier, vol. 264(1), pages 310-326.
    3. S Mudchanatongsuk & F Ordóñez & J Liu, 2008. "Robust solutions for network design under transportation cost and demand uncertainty," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(5), pages 652-662, May.
    4. Frederic H. Murphy & Zhong Xian Wang, 1993. "A network reformulation of an electric utility expansion planning model," Naval Research Logistics (NRL), John Wiley & Sons, vol. 40(4), pages 451-457, June.
    5. Shabbir Ahmed & Nikolaos V. Sahinidis, 2003. "An Approximation Scheme for Stochastic Integer Programs Arising in Capacity Expansion," Operations Research, INFORMS, vol. 51(3), pages 461-471, June.
    6. C A Poojari & C Lucas & G Mitra, 2008. "Robust solutions and risk measures for a supply chain planning problem under uncertainty," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(1), pages 2-12, January.
    7. Cheryl Gaimon, 1994. "Subcontracting versus capacity expansion and the impact on pricing of services," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(7), pages 875-892, December.

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