Transmission network expansion planning under demand uncertainty and risk aversion

The explicit incorporation of uncertainty in transmission network design can help to improve the balance between different and important concerns such as network utilization, demand satisfaction, or dynamic sourcing from lower-cost generation options. The explicit study of mean-risk trade-offs in network design can also better support planners in risk-related decisions. With these motivations, we present in this paper a mean-risk mixed integer linear programming model for transmission network expansion planning. The model has the potential to be used in practical applications, but in the scope of the paper is used to search for network design insights, with a study of loss-averse design of three fundamental network building blocks – an independent design, a radial design, and a meshed design. The study illustrates how different network designs feature different trade-offs between mean cost minimization and risk mitigation, focusing on the impact of network structure, loss aversion, variability, and demand correlation.

► Mean-risk mixed integer linear programming model for transmission network planning. ► Loss-averse design of independent, radial and meshed network building blocks. ► Independent – risk aversion increases investment in corridor with higher cost risk. ► Radial – shared corridor capacity increases in correlation, at same risk aversion. ► Meshed – any of the three designs can emerge as the optimal configuration.