Evaluation Method of Generation Expansion Planning for Power Generation Companies considering Capacity, Spot, and Balancing Markets

In Japan, power utilities have been divided into generation, retail, and transmission sectors, following the electricity system reform that began in 2016. In recent years, the Japanese electricity market has been improved. Generation and retail companies use the capacity, spot, and balancing markets to buy and sell electricity. Power generation companies must estimate profits from the electricity trades in the various markets to make their long-term business plans. As the first step, it is important to evaluate the sustainability of the long-term business plan throughout the entire power system. In this study, we propose a generation expansion planning evaluation method based on the generator unit commitment schedules considering the capacity, spot, and balancing markets. The proposed method can be used to check the sustainability of the power generation companies in the entire power system. The simulation results show that the design of the electricity market impacts on the profitability of power sources and can even enhance the economies of those with high operating costs.