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Author Munoz, F.D.; Hobbs, B.F.; Watson, J.P.
Title New bounding and decomposition approaches for MILP investment problems: Multi-area transmission and generation planning under policy constraints Type
Year 2016 Publication European Journal Of Operational Research Abbreviated Journal Eur. J. Oper. Res.
Volume 248 Issue 3 Pages 888-898
Keywords OR in energy; Stochastic programming; Benders decomposition
Abstract We propose a novel two-phase bounding and decomposition approach to compute optimal and near-optimal solutions to large-scale mixed-integer investment planning problems that have to consider a large number of operating subproblems, each of which is a convex optimization. Our motivating application is the planning of power transmission and generation in which policy constraints are designed to incentivize high amounts of intermittent generation in electric power systems. The bounding phase exploits Jensen's inequality to define a lower bound, which we extend to stochastic programs that use expected-value constraints to enforce policy objectives. The decomposition phase, in which the bounds are tightened, improves upon the standard Benders' algorithm by accelerating the convergence of the bounds. The lower bound is tightened by using a Jensen's inequality-based approach to introduce an auxiliary lower bound into the Benders master problem. Upper bounds for both phases are computed using a sub-sampling approach executed on a parallel computer system. Numerical results show that only the bounding phase is necessary if loose optimality gaps are acceptable. However, the decomposition phase is required to attain optimality gaps. Use of both phases performs better, in terms of convergence speed, than attempting to solve the problem using just the bounding phase or regular Benders decomposition separately. (C) 2015 Elsevier B.V. and Association of European Operational Research Societies (EURO) within the International Federation of Operational Research Societies (IFORS). All rights reserved.
Address [Munoz, F. D.] Univ Adolfo Ibanez, Fac Sci & Engn, Santiago, Chile, Email: fdmunoz@uai.cl;
Corporate Author Thesis
Publisher Elsevier Science Bv Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0377-2217 ISBN Medium
Area Expedition Conference
Notes WOS:000364603700013 Approved
Call Number UAI @ eduardo.moreno @ Serial 535
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Author Munoz, F.D.; van der Weijde, A.H.; Hobbs, B.F.; Watson, J.P.
Title Does risk aversion affect transmission and generation planning? A Western North America case study Type
Year 2017 Publication Energy Economics Abbreviated Journal Energy Econ.
Volume 64 Issue Pages 213-225
Keywords Risk aversion; Stochastic programming; Transmission and generation planning; Investment
Abstract We investigate the effects of risk aversion on optimal transmission and generation expansion planning in a competitive and complete market. To do so, we formulate a stochastic model that minimizes a weighted average of expected transmission and generation costs and their conditional value at risk (CVaR). We show that the solution of this optimization problem is equivalent to the solution of a perfectly competitive risk averse Stackelberg equilibrium, in which a risk-averse transmission planner maximizes welfare after which risk-averse generators maximize profits. This model is then applied to a 240-bus representation of the Western Electricity Coordinating Council, in which we examine the impact of risk aversion on levels and spatial patterns of generation and transmission investment. Although the impact of risk aversion remains small at an aggregate level, state-level impacts on generation and transmission investment can be significant, which emphasizes the importance of explicit consideration of risk aversion in planning models. (C) 2017 Elsevier B.V. All rights reserved.
Address [Munoz, Francisco D.] Univ Adolfo Ibanez, Fac Ingn & Ciencias, Diagonal Las Torres 2640, Santiago, Chile, Email: fdmunoz@uai.cl
Corporate Author Thesis
Publisher Elsevier Science Bv Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0140-9883 ISBN Medium
Area Expedition Conference
Notes WOS:000404704900020 Approved
Call Number UAI @ eduardo.moreno @ Serial 746
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Author Munoz, F.D.; Wogrin, S.; Oren, S.S.; Hobbs, B.F.
Title Economic Inefficiencies of Cost-based Electricity Market Designs Type
Year 2018 Publication Energy Journal Abbreviated Journal Energy J.
Volume 39 Issue 3 Pages 51-68
Keywords Electricity market design; market power; equilibrium modeling; opportunity costs
Abstract Some restructured power systems rely on audited cost information instead of competitive bids for the dispatch and pricing of electricity in real time, particularly in hydro systems in Latin America. Audited costs are also substituted for bids in U.S. markets when local market power is demonstrated to be present. Regulators that favor a cost-based design argue that this is more appropriate for systems with a small number of generation firms because it eliminates the possibilities for generators to behave strategically in the spot market, which is a main concern in bid-based markets. We discuss existing results on market power issues in cost- and bid-based designs and present a counterintuitive example, in which forcing spot prices to be equal to marginal costs in a concentrated market can actually yield lower social welfare than under a bid-based market design due to perverse investment incentives. Additionally, we discuss the difficulty of auditing the true opportunity costs of generators in cost- based markets and how this can lead to distorted dispatch schedules and prices, ultimately affecting the long-term economic efficiency of a system. An important example is opportunity costs that diverge from direct fuel costs due to energy or start limits, or other generator constraints. Most of these arise because of physical and financial inflexibilities that become more relevant with increasing shares of variable and unpredictable generation from renewables.
Address [Munoz, Francisco D.] Univ Adolfo Ibanez, Fac Ingn & Ciencias, Santiago, Chile, Email: fdmunoz@uai.cl
Corporate Author Thesis
Publisher Int Assoc Energy Economics Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0195-6574 ISBN Medium
Area Expedition Conference
Notes WOS:000431395500003 Approved
Call Number UAI @ eduardo.moreno @ Serial 851
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Author Ozdemir, O.; Munoz, F.D.; Ho, J.L.; Hobbs, B.F.
Title Economic Analysis of Transmission Expansion Planning With Price-Responsive Demand and Quadratic Losses by Successive LP Type
Year 2016 Publication Ieee Transactions On Power Systems Abbreviated Journal IEEE Trans. Power Syst.
Volume 31 Issue 2 Pages 1096-1107
Keywords Demand response; nonlinear optimization; successive linear programming; transmission planning
Abstract The growth of demand response programs and renewable generation is changing the economics of transmission. Planners and regulators require tools to address the implications of possible technology, policy, and economic developments for the optimal configuration of transmission grids. We propose a model for economic evaluation and optimization of inter-regional transmission expansion, as well as the optimal response of generators' investments to locational incentives, that accounts for Kirchhoff's laws and three important nonlinearities. The first is consumer response to energy prices, modeled using elastic demand functions. The second is resistance losses. The third is the product of line susceptance and flows in the linearized DC load flow model. We develop a practical method combining Successive Linear Programming with Gauss-Seidel iteration to co-optimize AC and DC transmission and generation capacities in a linearized DC network while considering hundreds of hourly realizations of renewable supply and load. We test our approach for a European electricity market model including 33 countries. The examples indicate that demand response can be a valuable resource that can significantly affect the economics, location, and amounts of transmission and generation investments. Further, representing losses and Kirchhoff's laws is also important in transmission policy analyses.
Address [Ozdemir, Ozge] Energy Res Ctr Netherlands ECN, Unit Policy Studies, NL-1043 NT Amsterdam, Netherlands, Email: ozdemir@ecn.nl;
Corporate Author Thesis
Publisher Ieee-Inst Electrical Electronics Engineers Inc Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0885-8950 ISBN Medium
Area Expedition Conference
Notes WOS:000372017600023 Approved
Call Number UAI @ eduardo.moreno @ Serial 603
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Author Perez, A.P.; Sauma, E.E.; Munoz, F.D.; Hobbs, B.F.
Title The Economic Effects of Interregional Trading of Renewable Energy Certificates in the US WECC Type
Year 2016 Publication Energy Journal Abbreviated Journal Energy J.
Volume 37 Issue 4 Pages 267-295
Keywords Renewable Portfolio Standards; Renewable Energy Credits; Transmission planning; Western Electricity Coordinating Council; Electricity markets
Abstract In the U.S., individual states enact Renewable Portfolio Standards (RPSs) for renewable electricity production with little coordination. Each state imposes restrictions on the amounts and locations of qualifying renewable generation. Using a co-optimization (transmission and generation) planning model, we quantify the long run economic benefits of allowing flexibility in the trading of Renewable Energy Credits (RECs) among the U.S. states belonging to the Western Electricity Coordinating Council (WECC). We characterize flexibility in terms of the amount and geographic eligibility of out-of-state RECs that can be used to meet a state's RPS goal. Although more trade would be expected to have economic benefits, neither the size of these benefits nor the effects of such trading on infrastructure investments, CO2 emissions and energy prices have been previously quantified. We find that up to 90% of the economic benefits are captured if approximately 25% of unbundled RECs are allowed to be acquired from out of state. Furthermore, increasing REC trading flexibility does not necessarily result in either higher transmission investment costs or a substantial impact on CO2 emissions. Finally, increasing REC trading flexibility decreases energy prices in some states and increases them elsewhere, while the WECC-wide average energy price decreases.
Address [Perez, Andres P.; Sauma, Enzo E.] Pontificia Univ Catolica Chile, Ind & Syst Engn Dept, Santiago, Chile, Email: esauma@ing.puc.cl
Corporate Author Thesis
Publisher Int Assoc Energy Economics Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0195-6574 ISBN Medium
Area Expedition Conference
Notes WOS:000385912700012 Approved
Call Number UAI @ eduardo.moreno @ Serial 666
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