Decision analysis of capacity expansion strategies for electrical utilities

The aim of the article is to demonstrate how decision analysis can be helpful in formulating and solving capacity expansion problems faced by electric utility companies. This general problem involves the specification of sizes and types of generation capacity (i.e., nuclear units, coal units, combustion turbines) to be brought on line at various points in time. Decision analysis is suggested as a means of identifying alternative strategies in the early stages of expansion planning in small power systems (i.e., 5000 MW or less). Such strategies serve as loose guidelines for detailed and often time-consuming studies that follow. An example problem (fashioned after an actual situation but with the data changed) is utilized to demonstrate decision analysis of nuclear- and coal-fuelled alternatives for meeting projected increases in need for base-loaded generation facilities.