This paper proposes an equilibrium approach for modeling
the centralized and distributed generation (CG and DG respectively) expansion
planning, by representing the operation and investments decisions of both the
traditional markets’ agents (GENCOs) and the incoming DG customers. More
specifically, GENCOs maximize their profits, while DG customers minimize their
net energy expenses, in the sense of Nash, considering the energy and reserve
commodities, and the network access tariffs of DG customers. CG units must meet
both the grid demand (power demand minus DG production) and the reserve
requirements, considering fuel, emissions, start-up and shut-down costs, and
ramp constraints. A weekly-simplified hydro unit management is also considered.
To simplify the resolution, the final equilibrium model is transformed into an
equivalent cost-minimization problem from its Karush-Kuhn Tucker conditions.
Several case examples show, for example, that for low DG
investment costs or high access tariffs, CG peaker technologies’ investments
decrease, CG base ones remain constant, while DG investments increase. Extreme
scenarios of low DG investment costs and high tariffs, although unlikely, show
also how load-defection and grid-defection situations may occur.