Multiple resource expansion planning in smart grids with high penetration of renewable generation

We study joint expansion planning of conventional generation capacity, wind generation capacity and tie line capacity in a multi-area smart grid system. Specifically, we formulate the expansion planning problem as a two-stage stochastic programming problem: 1) in the first stage, resource expansion plans are made to minimize the expected overall cost throughout the entire planning horizon; 2) in the second stage, given the realization of load and wind generation in hourly scheduling slots, optimal scheduling decisions of power flows are found by minimizing the cost incurred by conventional generation and/or loss of load, which is used to compute the expected operation cost and/or loss of load cost as part of the cost in the first stage. In particular, the optimal solution to the resource expansion planning problem is obtained using the L-shaped algorithm. The simulation results of several case studies indicate that the optimal expansion plans for a multi-area smart grid indeed depend on the uncertainty level of prospective wind generation, the existing generation capacity and the transmission capacity.