Optimal Grid Expansion Planning in Power Systems With Surplus Generation Capacity and Suppressed Demand

ABSTRACT Developing countries often grapple with uncoordinated planning of generation and transmission, leading to excess generation capacity and suppressed demand due to limited power delivery from inadequate transmission infrastructure. This study aims to address this challenge by proposing a coordinated generation and transmission expansion planning (GTEP) model that optimises investments to utilise surplus generation and meet suppressed demand. We develop a multistage stochastic GTEP model and compare its performance against isolated generation expansion planning (GEP) and transmission expansion planning (TEP) models on the IEEE 24‐bus reliability test system (RTS) using PLEXOS software. Results show that the GTEP model recommends 14.29% less generation capacity expansion (1500 MW) compared to the GEP model (1750 MW) over the planning horizon, while prioritising transmission reinforcements. This translates to a significant reduction in surplus generation (dump energy) of 38.17%. The TEP achieves a 42.94% reduction in dump energy, but this is offset by a higher risk of supply shortages due to a lack of consideration for future generation capacity expansion. Our findings demonstrate that the combined GTEP model offers an optimal expansion strategy, effectively utilising existing generation capacity and unlocking suppressed demand through strategic investments in both transmission and generation.