Energy 50 (2013) 74e82

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Energy
journal homepage: www.elsevier.com/locate/energy

Risk based multiobjective generation expansion planning considering

renewable energy sources
Mohsen Gitizadeh*, Mahdi Kaji, Jamshid Aghaei
Department of Electronics and Electrical Engineering, Shiraz University of Technology, Shiraz, Iran

a r t i c l e i n f o a b s t r a c t

Article history: Generation expansion planning is dened as the problem of nding the technology type, number of
Received 23 May 2012 generation units, size, and location of candidate plants within the planning horizon. In the deregulated
Received in revised form environment rather than the traditional system which considered the cost minimization as the main
27 November 2012
objective function in generation expansion planning problem, the major objective is to maximize the
Accepted 29 November 2012
Project Lifetime Economic Return. In this paper, the problem is solved considering three objectives,
Available online 3 January 2013
simultaneously (i.e. maximization of the Project Lifetime Economic Return, minimization of CO2 emis-
sion, and minimization of the fuel price risk due to the use of non-renewable energy sources).
Keywords:
Generation expansion planning (GEP)
Furthermore, due to the extensive use of renewable energy sources, e.g., onshore wind, offshore wind,
Renewable energy sources (RESs) solar, etc, the effect of these power plants has been investigated in this paper. In order to make the
Multiobjective optimization problem more compatible with the real world, some of the most common incentive systems (i.e. carbon
Modied normal boundary intersection tax, emission trade, quota obligation, and feed-in-tariff) have been considered for the problem formu-
(MNBI) lation. The problem is solved using Modied Normal Boundary Intersection method using General
Green certicate Algebraic Modelling System. Finally, a case study is designed to assess the efciency of the proposed
scheme.

2012 Elsevier Ltd. All rights reserved.

1. Introduction
The generation expansion planning (GEP) has historically
addressed the problem of determining what generation technology
to be commissioned, when the units to commit online, and where
the units to be installed. By the time the electricity industry
throughout the world was mainly dominated by vertically
integrated utilities, the main objective of GEP was to minimize the
total cost (including investment and operating cost), to meet the
expected demand growth. After mid-1980 by liberalization of
the electricity industry, energy producers had no more open access
to the grid and had a competition with other Generating Companies
(GENCOs) to sell their produced energy. In this case, for a price taker
GENCO, it is not guaranteed that its cost be covered and thus, the
main objective of the GENCO would be maximizing the Project
Lifetime Economic Return (PLER) rather than minimizing the cost.
As it was mentioned, GEP is one of the earliest problems in
power systems industry and numerous techniques have been
applied to solve the problem. In Ref. [1] dynamic programming and
* Corresponding author. Tel.: 98 711 7264121; fax: 98 711 7353502.
E-mail address: gitizadeh@sutech.ac.ir (M. Gitizadeh).
in Ref. [2,3] linear programing were used to solve the problem. In
Ref. [4] the Wien Automatic System Planning (WASP) is used to
solve GEP problem minimizing the cost of plan.
More recently the problem has solved by means of articial
intelligent methods. Chuang et al. used genetic algorithms in
Ref. [5]. In Ref. [6], the Evolutionary Programing (EP) technique
with Gaussian mutation is used, and in Refs. [7e11] Particle Swarm
Optimization (PSO), Simulated Annealing (SA), Tabu Search (TS),
Ant Colony Optimization (ACO), and Genetic Algorithm (GA) are
applied to solve the GEP problem.
The electricity industry is one of the most important parts of the
countries economy and is a signicant source of greenhouse gas
emissions. Moreover, its economic and environmental role is
growing in coming years. On the other hand, over the past decades,
the demand for electricity has steadily increased and is expected to
rise in the upcoming years. Thus, many governments around the
world have worked on the issue of global warming and environ-
mental protection. As the result they have agreed to Kyoto protocol
[12,13], which commits the countries to reduce their greenhouse
gas emissions. In Ref. [12] and [13], in order to cope with Kyoto
protocol, the level of CO2 emission is considered as a constraint in
GEP formulation. Nelson et al. [14] has carried out the power
system planning by considering various CO2 pricing scenarios

0360-5442/$ e see front matter
2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.energy.2012.11.040
 M. Gitizadeh et al. / Energy 50 (2013) 74e82 75

Nomenclature Sk,t expected coefcient of variation in prices of the fuel

type k in period t
at percentage of energy produced and must be balanced
Indices by green certicates in the tth year
gc
t index corresponding to years of the planning horizon hn coefcient for assigning the green certicates to the
n index corresponding to a generation technology renewable technology n corresponding to 1-MWh
available for planning generation
ufn,t utilization factor
Constants
T number of years in the planning horizon Variables
d discount factor (rate of return) per-unit time on Ets amount of energy sold in the tth year (MWh)
investment ex
En;t amount of energy produced by the existing units
In,t investment cost(V/MW) for the installation of (MWh)
a generating unit of technology n in the tth year new
En;t amount of energy produced by the new generating
pet average price of electrical energy in the tth year units (MWh)
(V/MWh) Un,t number of selected plants in the tth year
pgc
t green certicate price in the tth year (V/MWh) un,t number of units based on technology n beneting from
CO
n
2
rate of CO2 emission releasing by the nth generating renewable energy incentives in year t
unit (ton/MWh) Gst Gbt tradable Green Certicate (TGC) sold (bought) in the
old
En;t maximum energy (MWh) that can be produced in the tth year
tth year by the set of units already installed in the year
0, belonging to technology n. Sets
FTn,t feed-in tariff for technology n in the tth year Nex set of existing generating units
Pn rated power of generation units based on technology n Nnew set of candidate units
Jk set of unit fuel types

in order to make the planner use renewable energy sources. Careri
et al. [15] have modelled several incentive systems to evaluate their
application effect in the age of green economy.
To the best of our knowledge, the contributions of this paper
with respect to the previous researches in the area can be listed as
follows:
Integer Linear Programming (MILP). Section 3 introduces a frame-
work based on NBI method to solve the multiobjective problem. In
Section 4 simulation results are presented and the results obtained
by the application of the methodology are thoroughly discussed to
highlight the efcacy of the proposed approach. Some relevant
conclusions are drawn in Section 5.

(i) The generation expansion planning problem is solved using 2. Multiobjective generation expansion planning problem
a multiobjective mixed integer linear optimization model by formulation
a GENCO in the restructured power system. The proposed
optimization framework includes maximization of the GEN- RESs decrease the pollution production rates; contribute to the
COs PLER, minimization of CO2 emission, and maximization of attainment of the Kyoto Protocol climate change mitigation goals,
the energy price risk. In addition, a simple risk model has been permit countries to develop security of energy supply by
implemented that can quickly and efciently evaluate the fuel decreasing fossil fuel dependency and offer several socioeconomic
price volatility for the GEP problem. opportunities such as investment, development and job creation.
(ii) Renewable Energy Sources (RESs) have been considered in the The model presented here, includes several RESs and CO2
proposed GEP problem. Also, to motivate GENCOs to employ reduction measures. In this model three objectives are optimized in
these kinds of technologies, nancial incentives have been the viewpoint of a GENCO, while the previous models mostly
implemented in the proposed framework including feed-in consider only one objective. In comparison with single objective
tariffs and green certicate trading schemes. optimization techniques, the Pareto-based multiobjective optimi-
(iii) In the conventional multiobjective optimization methods, the zation methods have a number of advantages including the ability
range of the objective functions constructed based on the of having enough exibility to deal with conicting objectives [16].
payoff table may not be optimized. Consequently, it is not
guaranteed the resulting Pareto set be an efcient or non- 2.1. Objective functions
dominated Pareto set. Therefore, the lexicographic optimiza-
tion is proposed here to calculate the payoff matrix to be used 2.1.1. Maximization of PLER
in the NBI method. Accordingly, the Pareto optimal solutions This objective function is dened as the overall present value
of Multiobjective Generation Expansion Planning (MOGEP) are sum of revenues minus the total present value of costs.
identied using the Modied Normal Boundary Intersection 2 e s P P   new 3
(MNBI) method. pt Et  ex
ln En;t Ftn;t ln En;t
X 6 nN  7
f1 1d1t 4 P
nN ex new
 5 (1)
In;t Un;t Pn pt Gst Gbt
gc
The model is implemented in the General Algebraic Modelling tT 
nN new
System (GAMS), using CPLEX solver and applied to a hypothetical
GENCO [15]. In this formulation, FTn,t represents the feed-in tariff for tech-
The reminder of this paper has been organized as follows: In nology n in the tth year of the planning horizon. A feed-in tariff is
Section 2, the mathematical multiobjective generation expansion a policy mechanism designed to speed up investment in renewable
planning problem formulation is introduced in the form of a Mixed energy technologies. This aim can be attained by offering long-term
76 M. Gitizadeh et al. / Energy 50 (2013) 74e82

contracts to renewable energy producers, classically based upon 2.2.1. Energy balance
the cost of generation of each technology [17]. Besides, Gst Gbt is the This equality constraint shows the balance between the amount
Tradable Green Certicate (TGC) sold (bought) in the tth year. Green of energy by all units (existing as well as new ones) and energy sold
tags or green certicates stand for cost-efcient tools to stimulate at the market in year t.
electricity production from RESs. These certicates can be traded or X X
used, and can be sold together with the electrical energy or sepa- Ets ex
En;t new
En;t (5)
rately to it. nNex nN new
The other costs of each technology are considered as multiplying
the amount of produced energy by l. This coefcient is variable cost
of per-unit of energy which is as the variable unit cost (per MWh) of 2.2.2. Sold energy constraints
a payment stream that has the same present value as the total cost The amount of energy that the GENCO wants to sell at the
of building a generating plant over its life. Here it includes market is limited by proper bounds as follows.
decommissioning costs (Dn,t), fuel costs (Fn,t), and maintenance
Ets min  Ets  Ets max (6)
costs (Mn,t) as follows [15]:

PT Dn;t Fn;t Mn;t

t1 2.2.3. Quota obligation
1 dt1
ln for all n: (2) This constraint stands for the mechanism of the quota obligation
PT En;t
t1
for RESs. This obligation forces the electricity supply companies to
1 dt1 produce a specic part of their energy from RESs. Furthermore,
their green certicate will be tradable, and each GENCO can buy or
sell its right to other GENCOs upon its needs.
2.1.2. Minimization of environmental impacts
Despite the previously mentioned benets, renewable energy
!
X X
competes with conventional electricity on an imbalanced playing at Eknew Ekex Gbt  Gst
gc new
hn En;t (7)
eld amid a failure to internalize the negative externalities asso- kF nN new
ciated with conventional energy production. In other words, in
The right hand side of Eq. (7) is a specic fraction of the total
order to make the applications of RES more justiable, the party
produced energy from conventional sources, which must be
responsible for environmental pollution (e.g. air pollution) must be
balanced with the green certicate bought (sold) Gbt Gst and
in charge of paying for the negative impacts caused. In this case, it is
produced energy from renewable energy sources.
said that the external costs have been internalized and thus, the
market mechanism will not fail to secure an optimal allocation of
2.2.4. Generation limits
resources.
Energy output of the units should be limited by the following
Furthermore, the carbon dioxide emissions from fossil-fuel
inequalities:
plants should be minimized because of their danger for the global
warming (greenhouse). Therefore, the second objective is consid- new
En;t  8760  uf n;t un;t Pn;t (8)
ered as the minimization of the environmental effects by
minimizing   old
" #
ex
En;t  8760  uf n;t Pn;t Un;t  un;t En;t (9)
X X X
f2 CO 2 ex
n En;t CO2 new
n En;t (3) In Eq. (9) un,t > 0 by the time the incentive period is not expired.
tT nNex nNnew
After that, the unit is shifted from new units to existing ones.
Moreover, more polluting gases such as NOx and SOx can be
considered if necessary. It should be noted that by minimizing CO2 2.2.5. Maximum construction time
emission, the released NOx and SOx will be minimized. These physical constraints reect the maximum number of
yearly construction capability of various types of units to be
2.1.3. Minimization of energy price risk (volatility) committed in the planning horizon.
A key feature in the price of the electrical energy is the fuel price
in conventional energy sources. Fuel price changes dramatically 0  Un;t  U n;t (10)
due to numerous reasons over time and thus, it is desired for
a GENCO to control the risk of employing units using different types 0  un;t  un;t (11)
of fuels. The following equation contributes the vulnerability of
energy price changes to the expansion plan model. More speci-
cally using this equation the fuel price volatility is to be minimized. 2.2.6. Maximum investment limit
2 3 This economic constraint stands for the maximum amount of
X X X investment which will be made by the GENCO.
f3 4 Sk;t En;t 5
F
(4)
tT kF nJk " #
X
T
1t
X
1 d In;t Pn Un;t  Imax (12)
This risk measure in prices is simple but original in multiobjective
t 1 nSnew
models [18].

2.2. Constraints 2.2.7. Non-negativity constraints

The following variable should be positive in the problem.
In this multiobjective problem nine sets of constraints have
been applied as described below. Gbt ; Gst ; Un;t ; un;t ; Ets ; En;t
new ex
; En;t  0 (13)
 M. Gitizadeh et al. / Energy 50 (2013) 74e82 77

3. Solution methodology

Generally, in Multiobjective Optimization Problem (MOP), it

should be dealt with several conicting objective functions, causing
to have more than a single optimal solution. In this case, the
Decision Maker (DM) should nd the most preferred optimal
solution among all the obtained ones. In such problems, the ef-
cient solution (Pareto Optimal) is the one optimal solution which
cannot be improved in one objective unless at least one of the other
objectives deteriorates.
In this paper, in order to nd the Pareto surface the NBI
method is used, which is shown to be more effective comparing
to other methods when dealing with non-linear and mixed
integer problems [19]. The Normal Boundary Intersection (NBI)
[20e22] method uses a geometrically intuitive parameterization
to produce an even distributed set of points on the Pareto
surface, even for poorly scaled problems. In this method, in spite
of the advantages, the objective functions over the efcient set Fig. 1. Graphical description of multiobjective reference points.
should be optimized. Thus, lexicographic optimization technique
is used here.
where
3.1. Multiobjective mathematical programming
 
fiN maxfi x ; xU (18)
In mathematical terms, for a general Multiobjective Optimiza-
tion Problem (MOP): Furthermore, as it is shown in Fig. 1 another point will be
h     dened as pseudo nadir point which is in the feasible region.
   iT
min F X f1 x ; f2 x ; .; fp x (14) h i
f SN f1SN ; .; fiSN ; .; fpSN
In which X U, p  2 andU fxRp : hx 0; gx  0; a  x  h      i (19)
bg. Here the feasible area is denoted by U and x is the decision fiN max fi x*1 ; .; fi x*i ; .; fi x*p
variable of the problem. For a MOP, a point x* U is said to be
optimal (or Pareto optimal) if and only if there is no x U such that Another point generally outside the feasible region at which all
fi(x)  fi(x*) for all i 1, 2, ., p with at least one strict inequality. objectives are at their ideal optimal value is called utopia point. It is
The rst step in the application of NBI method is the preparation denoted by f U in Fig. 1 and can be expressed as:
of the payoff matrix. In order to form this matrix with p different h i h      i
objective functions, each objective (fi) should be optimized indi- f U f1U ; .; fiU ; .; fpU f1* x*1 ; .; fi* x*i ; .; fp* x*p
vidually. The optimum value of fi(x) is denoted by fi (x*i ) in which x*i
indicates the vector of decision variable corresponding to the (20)
optimal solution of the objective function fi. In the next step, by the Convex Hull Individual Minima (CHIM) is dened as the line
achieved value of x*i other objective functions f1, f2, . fi1, fi1, ., fp connecting anchor points in the normalized space. It can be
are calculated, and represented by f1(x*i ), f2(x*i ), ., fi1(x*i ), fi1(x*i ), expressed as the following
., fp(x*i ). The procedure will be continued until the last objective
function be optimized, individually. Consequently, the payoff table
( )
P
p
can be achieved in the following form: H 4:wk : bi Rp ; bi 1; 0  bi  1
i1 (21)
0      1  
f * x* / f1 x*i / f1 x*p wk b1 ; b2 ; .; bp
B 1 1 C
B C
B   1    C Generally, in MOP each objective function has its own physical
F B
B fi x*1 fi* x*i
C
fi x*p C interpretation with different order of magnitude. Hence, based on
B C
B     1  C
@ A the dened terms (utopia and pseudo nadir points) all the objective
fp x*1 / fp x*i / fp* x*p functions will be transformed as follows.
0 1  
f11 / f1i / f1p   fi x  fiU
B 1 C f i x SN (22)
B C fi  fiU
B
B fi1 fii fip C
C (15)
@ 1 A
This transformation normalizes each objective function and
fp1 / fpi / fpp maps them into the [0 1] interval. Here, the bar expressed the
A few remarks should be presented here, before enhancing the normalized value of variables. Therefore, in the normalized space
NBI method to the modied MOP solution. each point can be shown as:
As it is shown in Fig. 1 there is a point in the space at which all 0 1 2 3
the objective functions are at their worst value, this point is called b1 411 . bp 41p
Nadir Point. In mathematical form it can be written as: P @b1 ; .; bp A 4 5 (23)
bp 4p1 . bp 4pp
h i
f N f1N ; .; fiN ; .; fpN (17) Pp
where i1
bi 1and0  bi  1.
78 M. Gitizadeh et al. / Energy 50 (2013) 74e82

Table 1 Table 3
Existing plant data. Obtained results from the rst scenario for all objective functions.

Technology Energy (GWh) Rated power (MW) Utilization factor Cases Importance f1 (MV) f2 (ton) f3 (MV) mkii1
total
On-shore wind 480 100 0.19 b1 b2 b3
Coal/steam 4440 600 0.68
Case I 1 e e 2803.506 e e e
Oil/CT 2000 400 0.49
Case II e 1 e 2043.440 e
Oil/steam 1200 500 0.47
Case III e e 1 e e 0.051 e
CCGT 21,280 400 0.57
Case IV 0.4 0.6 e 2158.380 169117.609 e 0.559
0.5 0.5 e 2305.360 216733.915 e 0.574
The distance between the Pareto surface and CHIM can be 0.6 0.4 e 2403.400 251818.994 e 0.581
Case V 0.4 e 0.6 2168.870 e 5.688 0.887
achieved as 0.5 e 0.5 2411.600 e 11.926 0.903
2 3 2  3
0.6 e 0.4 2551.620 e 46.418 0.811
b
n b1 411 . bp 41p  f 1 x Case VI e 0.4 0.6 e 2291.799 0.067 0.804
6 17
D4 5 4  
5 (24) e 0.5 0.5 e 2143.948 0.071 0.880
e 0.6 0.4 e 2099.037 0.098 0.824
bp
n bp 4p1 . bp 4pp  f p x Case VII 0.2 0.4 0.4 604.750 69081.078 20.419 0.698
0.33 0.33 0.33 1853.640 74516.508 22.084 0.815
_ _ _ T
In this equation n n 1 ; .; n p  represents the normal unit 0.4 0.2 0.4 1896.240 121439.729 36.335 0.767
vector to the CHIM and Fx f 1 x; .; f p xT shows the coordi- 0.4 0.4 0.2 1952.920 146694.047 71.544 0.490

nates of the crossing point between Pareto surface and normal to

the utopia line [23]. In this case the optimizing the objective
objective function to its utopia value (farther from its pseudo nadir)
function (14) can be achieved by solving a set of single objective
results in the higher membership function (higher degree of opti-
problems (25) in which the distance between the Pareto surface
mality) for the objective function in the Pareto optimal solution.
and CHIM will be maximized.
The mathematical formulation of these membership functions is
maxD as follows:
_  
s:t: : 4:wk n D F x (25) 8
hx 0; gx  0 >
> 0
>
> fik  fiU
< f k  f SN
By solving (25), for w sets, wk k 1; 2; .; Nw the Pareto mkii1 i i
fiU  fik  fiSN (26)
>
> fiSN  fiU
surface can be obtained in a point-wise estimation. More details on >
> fiSN  fik
:1
the production of w sets can be found in [23].

3.2. Fuzzy Decision Making 8

>
>
>1
> fik  fiU
< f k  f SN
Much of a decision making in the real world takes place in an mkii2;3 i i
fiU  fik  fiSN (27)
environment in which the goals, the constraints and the consequence >
> fiSN  fiU
>
> fiSN  fik
of possible actions are not known precisely. To deal quantitatively :0
with imprecision, we usually employ the concepts and techniques of
fuzzy logic. By means of the Fuzzy Decision Making (FDM) the most The fuzzication procedure described in (26) and (27) is used for
desired solution between the Pareto optimal solutions can softly be the objective functions that should be maximized and minimized,
chosen. After obtaining the Pareto-optimal solutions by solving the respectively [24]. The total membership function (total degree of
optimization sub-problems, it is necessary for the decision-maker optimality) of each Pareto optimal solution is computed consid-
too choose one the best compromise solution according to the ering the individual membership functions and the relative
specic preference for different applications. Hence, for each objec- importance of the objective functions (ui values) as follows:
tive function in the Patero optima solution, a linear membership
function is calculated. This function measures the relative distance X
3
mk ui mki (28)
between the value of the objective function from its values in the
i1
respective utopia and pseudo nadir points. The closer value of the

Table 4
Table 2
Number of chosen candidate plants in the rst scenario.
Candidate plant data.
Cases Coal/steam Oil/CT Oil/steam CCGT Nuclear
Generation I Tconstruction Tlife P N l S hgc
technology I 5 4 5 5 4
MV/MW Year Year MW Hour V/MWh V/MWh II 2 1 5 4
Coal/steam 1 4 25 600 6000 33.96 12.7 0 III 5 1 5 4
Oil/CT 0.39 3 25 400 4300 124.8 870.4 0 IV(1) 5 3 1 4
Oil/steam 0.39 3 25 500 4100 124.8 870.4 0 IV(2) 4 5 4
CCGT 0.47 2 25 400 5000 72.46 28.9 0 IV(3) 5 2 2 2 4
Nuclear 2.5 7 45 1200 7800 13.95 0.003 0 V(1) 4 4 4 4 4
On-shore 1.2 2 20 100 1700 44.79 1 V(2) 5 2 4 4
wind V(3) 5 4 1 5 4
Off-shore 2.8 3 25 100 2700 60.57 1.6 VI(1) 3 1 5 4
wind VI(2) 1 5 4
Geothermal 3.5 3 20 100 7700 32.82 1.8 VI(3) 1 5 4
Biomass 2.35 2 15 20 6100 146.74 1.5 VII(1) 5 4 4 5 3
Waste 4 2 20 50 5000 58.31 1.9 VII(2) 1 4 4 4
Thermal 5 3 25 10 2000 72.41 2 VII(3) 3 4 1 2 4
solar VII(4) 4 3 3 5 3
 M. Gitizadeh et al. / Energy 50 (2013) 74e82 79

5 0.25
x 10
6

5 0.2

4
Emission (ton)

Risk (M)
0.15
3

2
0.1
1

0 0.05
1600 1800 2000 2200 2400 2600 2800 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900
Emission (ton)
PLER (M)
Fig. 4. Emission and fuel price volatility (Risk) Trade-off in the rst scenario.
Fig. 2. PLER and Emission Trade-off in the rst scenario.

variation in prices of the fuel type k in period t, and N is the

The best planning scheme is determined by ranking the utilization hours per year. In this table, coefcient hgc is to assign
schemes based on value of mk which is represented in (28). In this green certicate to renewable energy source to be compatible in
paper, the importance of objective functions is the same as w values the market. The construction time of each plant is also considered
which was introduced in Eq. (25). as a constraint in this problem.
To have better illustration of the proposed framework features,
two scenarios have been studied in the following subsections.
4. Simulation results and discussion

The proposed framework of the GEP problem is applied on 4.1. Scenario I: GEP without considering RES-based technologies
a hypothetical GENCO for a 14-year planning horizon. The energy
market price is supposed to increase linearly from 90.1 V/MWh In order to analyse the effects of RES-based technologies in the
(year 2012) to 108.3 V/MWh (the last year of planning horizon). proposed MOGEP problem two scenarios are analysed here. In this
This price is considered to be deterministic and its stochastic nature scenario, the candidates are coal, oil, combined cycle gas turbine,
is ignored in this study. As in [15], the annual price of green and nuclear power plants.
certicates can be obtained bypgc t 180  pt . The main charac-
e
Using the MNBI method for the proposed formulation of the
teristics of the existing technologies are presented in Table 1 which MOGEP, the payoff table obtained. According to the payoff table (F)
represents the initial conditions of the expansion plan [15]. The the ideal and anti-ideal points of objective functions f1 to f3 is
technology of coal-red power plant is super-critical pulverised determined as the minimum and maximum values of rows 1 to 3,
coal (SCPC). In this table, the technology of Oil/CT power plant is respectively.
based on the combustion turbine and CCGT shows the combined 2 3
cycle gas turbine. 2803:50 473:08 535:51
In order to calculate the present value of the rst objective F1 4 506421:20 2043:44 2883:20 5
function (i.e. PLER) a 5% discount rate is considered (r 0.05). 15:43 0:21 0:05
Table 2 consists of 11 different types of plants including non-RESs
The results of the rst and third rows in terms of million euros
(for instance, nuclear plant) and RES-based technologies [15].
are related to the PLER and fuel price volatility (risk), and the
Here I is the capital cost of each technology, and l is the variable cost
second row in ton corresponds to the emission. The main diagonal
of different candidate plants. P shows the rated power of generation
of the payoff table F1 shows the result of the individual optimiza-
units based on technology n, Sk,t is the Expected coefcient of
tion of the objective functions (the utopia point).

150

150

100
Risk (M)

100
Risk(M)

50
50
0
6
4 6000
5
4000
0 10 2 2000
0 500 1000 1500 2000 2500 3000 0
0 -2000
PLER (M) Emission (ton) PLER (M)

Fig. 3. PLER and fuel price volatility (Risk) Trade-off in the rst scenario. Fig. 5. PLER, Emission, and fuel price volatility (Risk) trade-off in the rst scenario.
80 M. Gitizadeh et al. / Energy 50 (2013) 74e82

Table 5 5
x 10
Obtained results from the second scenario for all objective functions. 3
Cases Importance f1(MV) f2(ton) f3(MV) mkii1
total 2.5
b1 b2 b3
Case I 1 e e 4769.120 e e e

Emission (ton)
2
Case II e 1 e e 405.609 e e
Case III e e 1 e e 0.013 e
Case IV 0.4 0.6 e 4466.372 107955.756 e 0.592 1.5
0.5 0.5 e 4498.703 131415.621 e 0.297
0.6 0.4 e 4593.382 158952.942 e 0.270 1
Case V 0.4 e 0.6 2941.861 e 1.134 0.640
0.5 e 0.5 3604.525 e 1.278 0.707
0.6 e 0.4 4060.827 e 1.655 0.194 0.5
Case VI e 0.4 0.6 e 424.415 0.027 0.630
e 0.5 0.5 e 421.282 0.034 0.608 0
e 0.6 0.4 e 418.143 0.042 0.586 4200 4300 4400 4500 4600 4700 4800
Case VII 0.2 0.4 0.4 793.416 112800.703 2.001 0.358 PLER (M)
0.33 0.33 0.33 2092.370 98023.348 1.594 0.528
0.4 0.2 0.4 2561.210 102360.317 1.654 0.557
Fig. 6. PLER and Emission Trade-off in the second scenario.
0.4 0.4 0.2 2693.990 101842.444 1.791 0.578

Table 3 shows the value of each objective function in seven cases
where b represents the importance of each objective and m is the
total membership function value. The rst three cases are the
single-objective ones, Cases IV, V, and VI are two-objective prob-
lems and the Case VII is the three-objective optimization problem.
In this table, f1, f2 and f3 show the amount of PLER, emission and fuel
price (volatility) risk, respectively.
As it can be observed in Table 3, cases I, II, and III show the best
values of each objective. In these cases, the single objective
problem is solved and the values attained are the most optimum
ones comparing to other cases which is because the other con-
icting objectives do not have an effect on the results. By increasing
the value of b in other cases, the value of f1, f2, and f3 seek to reach to
their optimum values. The conicting nature of all objective func-
tions is realizable here. For instance, in case V by increasing the
importance of the PLER, the amount of the second objective func-
tion increases which means in this case more CO2 is produced. This
change in the emission production can be respected to the
combination of the chosen candidate plants. The comparison of
chosen plants and their effect on the objectives can be done by
considering Table 4. This table shows the number of different
chosen plants in planning horizon.
It is expected that the selected plants be based on the impor-
tance of the objectives, which is when the risk objective plays the
most important role, the number of candidates having a higher
value of risk function, S, be less than before. In the same way, when
the PLER objective is the most important one, the plants having
lower investment and operational cost should be chosen.
Considering Tables 2e4, it can be said that in case I when the
PLER is to be maximized, nearly all the plants have their maximum
allowable number. By changing the priority of the objectives, it can
be seen that in case II, the use of a coal unit as the one having the
highest value of CO2 emission rate is completely stopped, and
besides the number of oil units with the higher CO2 emission rate
than the nuclear and CCGT plants, is also decreased. The same
analysis can be done for Case III where the use of oil units is limited
compared with the Case I. It can be recognized that in other cases
where the problem is solved as a multiobjective one, the number
of chosen candidates are more than the units discussed in cases II
and III. The conicting nature of the objectives is obvious and is
shown in Table 3, and Figs. 2, 3, and 4 which show the Pareto front
of two-objective cases IV, V and VI, respectively.
It should be noted that in Figs. 2 and 3 when PLER enhances,
the other objectives deteriorates which is in the opposite direction
of its optimum value. Fig. 5 shows the three-objective case corre-
sponding to the case VII of Tables 3 and 4.
4.1.1. Scenario II: GEP considering RES-based technologies
In this scenario, six different RESs including on-shore wind, off-
shore wind, geothermal, biomass, waste, and thermal solar are
considered as the candidate plants of MOGEP problem in addition
to conventional technologies mentioned in the rst scenario.
Table 5 shows the value of the objectives in seven different cases.

Table 6
Number of chosen candidate plants in the second scenario.

Cases Coal/Steam Oil/CT Oil/Steam CCGT Nuclear On-shore wind Off-shore wind Geo-thermal Biomass Waste Thermal solar
I 5 1 4 4 4 1 4
II 4 5 1 3 1
III 5 2 4 4
IV(1) 2 1 5 3 4 4 1 4
IV(2) 4 2 4 4 1 4 2
IV(3) 5 2 4 1 4 4 3
V(1) 5 2 4 4 4 4
V(2) 4 3 4 4 3
V(3) 4 5 4 4 4 2
VI(1) 1 5 4 4 1
VI(2) 1 5 4 4 1
VI(3) 1 5 4 2
VII(1) 5 2 2 4 2 2 1 4 2
VII(2) 2 1 2 5 3 4 1 1 2
VII(3) 2 3 5 4 4 4 1
VII(4) 2 2 5 4 4 1 4 1

2.5
2
Risk (M)
1.5
1
0.5
0 1000
0 1000 2000 3000
PLER (M)
Fig. 7. PLER and fuel price volatility (Risk) Trade-off in the second scenario.
Although, the part of discussion on the number of selected units
and the objectives behaviour is almost the same, comparing
Tables 3 and 5, shows the noticeable role of RESs. Moreover, in this
scenario the Eq. (7), i.e., green certicate trading scheme, was used
which affects the GENCOs PLER. As an example, the value of PLER in
case I in the second scenario has a 70% increase while the level of
the produced emission in the planning horizon in case II decreased
80%. The later can be easily realized by assessing the combination of
selected units provided in Table 6. It is noteworthy that the non-
zero value of the emission is due to the conventional power
plants existing in the initial condition of the problem. The same
remark applies on case III where no thermal power plant is selected
among the candidates. In this case the value of the risk corre-
sponding to the fuel price variations is decreased down to 0.013
million euros which is 25% of the rst scenario.
In the two objective optimization cases, it can be seen that the
selection of RESs leads to higher PLER and lower values of risk and
emission which can be found in Figs. 2e9.
Another interesting observation which can be inferred from
Figs. 8, 9 and Eqs. (3) and (4) is that in both equations the amount of
produced energy is multiplied with coefcients S and CO2 . But as it
is shown in Table 2, these values have different behaviour ratios. In
other words, while the value of coefcient S for Coal/Steam unit is
smaller than Oil/CT, Oil/Steam, and CCGT, it has a higher emission
production rate than the others which in turn leads to conicting
manner of the objectives f2 and f3. This point beside Table 6 helps to
clarify the behaviour of the objective functions shown in Fig. 9.
0.07
0.06
0.05
Risk (M)
0.04
0.03
0.02
0.01
405 410 415 420 425 430
Emission (ton)
Fig. 8. Emission and fuel price volatility (Risk) Trade-off in the second scenario.
M. Gitizadeh et al. / Energy 50 (2013) 74e82 81
6
Risk (M)
4
2
0
3
2 5000
4000
5
1 3000
10 2000
4000 5000 0 0
Emission (ton) PLER (M)
Fig. 9. PLER, Emission, and fuel price volatility (Risk) trade-off in the rst scenario.
By comparing the payoff table obtained for the second scenario
(F2) with F1 the effect of incorporating RESs and green certicate
trading scheme is observable on the utopia point.
2 3
4769:12 792:35 792:70
F2 4 270360:24 405:6 445:6 5
4:33 0:07 0:01
5. Conclusions
In this paper, a new multiobjective framework for GEP problem
has been introduced. The proposed MOGEP model, owning MILP
formulation, includes cost function, emission and risk of fuel prices
as the competing objective functions. Furthermore, the results
show the trade-off between the presented objectives. Therefore,
the decision maker is able to choose the best combination of the
plants upon its needs. To cope with the MOGEP problem, a new
multiobjective framework named MNBI, composed of lexico-
graphic optimization (for the calculation of a more effective payoff
table) and NMI method, has been proposed.
Because of the extensive plans for using RESs, several renewable
sources are considered as the candidate plants of the GEP problem.
Moreover several mechanisms are included in the model to speed
up the use of RESs. The suggested framework is implemented on
the multiobjective generation expansion planning problem in the
viewpoint of a GENCO. Further work is on track in order to add the
uncertainty of different parameters (e.g. energy price, the amount
of energy produced by RESs, etc.) to extend the proposed deter-
ministic scheme to a stochastic framework.
Also, different risk indices including operational, credit and
political and regulatory risks of energy technologies in the
proposed multiobjective GEP framework can be considered as an
extension to this work in the future research.
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