Co-Optimization of Transmission and Other Supply Resources

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Co-Optimization of Transmission and Other Supply Resources Co-optimization of Transmission and Other Supply Resources September, 2013 Illinois Institute of Technology Iowa State University Johns Hopkins University Purdue University West Virginia University For EISPC and NARUC Funded by the U.S Department of Energy Co-optimization of Transmission and Other Supply Resources prepared for Eastern Interconnection States’ Planning Council and National Association of Regulatory Utility Commissioners prepared by Dr. Andrew (Lu) Liu, Purdue University Dr. Benjamin H. Hobbs and Jonathan Ho, Johns Hopkins University Dr. James D. McCalley and Venkat Krishnan, Iowa State University Dr. Mohammad Shahidehpour, Illinois Institute of Technology Dr. Qipeng P. Zheng, University of Central Florida Acknowledgement: This material is based upon work supported by the Department of Energy, National Energy Technology Laboratory, under Award Number DE-OE0000316. The project team would like to thank Bob Pauley, Doug Gotham and Stan Hadley as well as the EISPC and NARUC organizations, for their support throughout this project. Patrick Sullivan of NREL provided crucial perspectives, advice, and resources during the project. We would also like to acknowledge inputs on earlier versions of our work by members of NARUC’s Studies and Whitepaper Workgroup. The earlier versions as well benefited from the editorial assistance provided by Jingjie Xiao, a former PhD student with the School of Industrial Engineering at Purdue University, and her generous efforts are greatly appreciated. In addition, the team gratefully acknowledge the generous and timely assistance of several organizations that have provided important background information on transmission planning, including but not limited to: Parveen Baig, Iowa Utilities Board Jaeseok Choi, Gyeongsang National University, South Korea Bruce Fardanesh, New York Power Authority Flora Flydt, ATC Ian Grant, TVA Bruce Hamilton, Smart Grid Network Ben Harrison, Duke Energy Michael Henderson, ISO New England Len Januzik, Quanta Technology David Kelley, SPP Raymond Kershaw, ITC Holdings Corp. Amin Khodaei, University of Denver Richard Kowalski, ISO New England Zuyi Li, Illinois Institute of Technology Chuck Liebold, PJM Paul McCoy, McCoy Energy Mark McGranaghan, Electric Power Research Institute Doug McLaughlin, Southern Company Bob Pierce, Duke Energy Wanda Reder, S&C Electric Dan Rochester, Electricity System Operator – Ontario Hussam Sehwail, ITC Holdings Corp. JT Smith, MISO Timothy L Smith, TVA Osman Tor, EPRA, Turkey Jianhui Wang, Argonne National Lab David A. Whiteley, Whiteley BPS Planning Ventures LLC Keith Yocum, LGE/KU Opinions expressed in this report, as well as any errors or omissions, are the authors‘ alone. Disclaimers: This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. The information and studies discussed in this report are intended to provide general information to policy-makers and stakeholders but are not a specific plan of action and are not intended to be used in any State electric facility approval or planning processes. The work of the Eastern Interconnection States’ Planning Council or the Stakeholder Steering Committee does not bind any State agency or Regulator in any State proceeding. TABLE OF CONTENTS EXECUTIVE SUMMARY AND RECOMMENDATIONS ..................................................... 1 ES-1. Overview ........................................................................................................................................ 1 ES-2. Definition ....................................................................................................................................... 2 ES-3. Benefits of Co-optimization and Anticipatory Transmission Planning .................................. 3 ES-4. General Recommendations on Model Development and Demonstration ............................... 5 ES-5. Recommendations on Tool Design .............................................................................................. 5 ES-6. Data requirements ....................................................................................................................... 9 ES-7. Institutional Considerations ....................................................................................................... 9 1 INTRODUCTION ................................................................................................................... 11 1.1 Motivation ....................................................................................................................................... 11 1.2 Scope ................................................................................................................................................ 12 2 REVIEW OF PRACTICE, METHODS, AND NEEDS OF RESOURCE PLANNING MODELING AND CO-OPTIMIZATION ............................................................................... 14 2.1 Introduction ..................................................................................................................................... 14 2.2 Review of Practice and Literature of Resource Modeling .......................................................... 14 2.2.1 Generation planning models ...................................................................................................... 15 2.2.2 Transmission planning models .................................................................................................. 24 2.3 Co-optimization ............................................................................................................................... 29 2.3.1 Definitions of co-optimization .................................................................................................. 29 2.3.2 Review of co-optimization models ............................................................................................ 31 2.3.3 Network representation - Model fidelity ................................................................................... 37 2.3.4 Network representation - Modeling coverage ........................................................................... 44 2.3.5 Additional planning tool attributes ............................................................................................ 51 3 IMPLEMENTATION REQUIREMENTS FOR CO-OPTIMIZATION MODELING ... 58 3.1 Incremental Data and Their Benefits ........................................................................................... 58 i 3.1.1 Data for current long-term planning .......................................................................................... 58 3.1.2 Incremental data needs .............................................................................................................. 60 3.1.3 Benefits of incremental data ...................................................................................................... 60 3.2 Computational Requirements ........................................................................................................ 61 3.2.1 Difficulties, challenges and opportunities on computing requirements for co-optimization models ................................................................................................................................................ 62 3.2.2 Decomposition approaches for co-optimization models ........................................................... 64 3.3 Steps Needed to Acquire Data and Execute Co-Optimization Models ...................................... 70 3.3.1 Data and information for co-optimization ................................................................................. 70 3.3.2 Industry perspective on the scope of co-optimization and tools ............................................... 74 3.4 Time Requirements for Model Development and Validation ..................................................... 76 4 APPLICATIONS: CASE STUDIES OF CO-OPTIMIZATION BENEFITS AND VALIDATION ............................................................................................................................ 81 4.1 Introduction ..................................................................................................................................... 81 4.2 Potential Benefits of Co-Optimization: Some Simple Examples ................................................ 81 4.2.1 Introduction ............................................................................................................................... 81 4.2.2 Summary of optimization approaches: Generation, transmission, and co-optimization planning ............................................................................................................................................................ 82 4.2.3 Analyses of benefit
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