IEEE Power & Energy Magazine - July/August 2016 - 31

The twists and turns of the power industry over the past decades
have taught us that disregarding uncertainty can be costly
and even fatal for companies.

Three Key Considerations
for these reasons, the next generation of transmission planning tools needs to recognize three key considerations when
quantifying the many types of economic benefits that new
transmission investments can provide. These include system-level interactions among transmission and generation
investments, variation in generation and load conditions
and uncertainty concerning long-run drivers of supply-anddemand conditions, and the ability to adapt the system as
conditions change in unexpected ways.

System-Level Interactions
recognizing system-level interactions requires us to address
two questions regarding how transmission reinforcements
interact with each other and with generation.
✔ how do proposed transmission facilities interact with
each other, resources, and the rest of the network to
determine overall system economic and environmental performance?
✔ how might siting and operating decisions by investors
in generation and other resources be affected by the
availability of transmission resources?
Ideally, grid planning should anticipate how generation investments might shift in response to transmission
investment, which would represent a proactive or anticipative transmission planning paradigm. This paradigm
can be implemented by cooptimizing transmission and
generation investment, if it is assumed that generation
markets are competitive while grid owners plan the grid
and price transmission to maximize the net benefits of the
power system.

Short-Term Variations and Long-Run
Uncertainties
planning methods should consider many scenarios for both
short-term variations and long-run uncertainties.
✔ for the short term, how does a proposed investment
enhance a system's ability to take advantage of shortterm resource and load diversity? a method must be
able to consider many possible operating conditions to
properly evaluate tradeoffs between focusing investment on the best-quality renewable resources versus
the benefits of drawing on diverse resources across a
large region.
✔ over the long run, how does the investment contribute
to the system's robustness in the face of the profound
32

ieee power & energy magazine

policy, technological, and economic changes that
might occur over the assets' 40 (or more)-year lifetime? Given the uncertainties, what investments can
be made now with confidence, and which should be
deferred until more is known?

Adaptabillity
a system's capacity to cope with long-run uncertainties
depends in large measure on its adaptability. There are several dimensions to adaptability.
✔ first, it must be determined if a particular proposed
transmission addition opens up alternative operational
and planning responses to future developments-or if
it forecloses them.
✔ second, flexibility in timing of investments must be
allowed. It is important to consider how uncertainty
could affect the optimal timing of a proposed transmission addition. for instance, in the face of uncertainty, postponing commitments to obtain more
information or resolve uncertainties about, e.g., the
future of climate policy could be optimal. Is the best
response to long-run uncertainties to delay transmission investments and avoid the risk of stranded assets
by waiting until uncertainties are resolved?
✔ Third, portfolio diversification is an issue. might the
best response to uncertainty be to build a larger portfolio of transmission? extra lines might then act as
"insurance" against the uncertainties-for instance,
by ensuring access to a wider range of possible developable renewable resources.

Making the Most of Grid Planning
In the rest of this article, we describe how today's transmission planning tools are being enhanced to include the three
key features discussed previously. specifically, we will look at
✔ cooptimization models that identify economically attractive transmission additions, while simultaneously
anticipating how the grid investments could affect
where and what type of generation investment will
take place
✔ stochastic models that consider how today's transmission investments would fare under each of multiple
possible futures
✔ multistage models that recognize how the grid and
generation mix can be modified in the future as the
uncertainties unfold.
july/august 2016



Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - July/August 2016

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