Multiobjective strategies in power systems

planning
Ibrahim KAVRAKOGLU *
Department of Industrial Engineering and Operations Research.
University of California, Berkelqv, CA 94270, U.S.A.
Giilseren KIZILTAN
The Scientific and Technical Rrearch Council of Turkey,, Gehre,
Kocaeli, Turkey
Received May 1981
Revised June 1982
The rapidly changing decision environment in electrical
systems planning calls for a new approach in planning proce-
dures and mathematical tools. The method proposed in this
study decomposes the decision making into two strata, one at
the strategy setting, the other at the project selection level. For
the strategy setting level, a multiobjective dynamic linear pro-
gramming model is used in generating system expansion deci-
sion alternatives. The suitability of the modefling approach is
considered from the various aspects such as congruence, flexi-
bility, transparency, and accuracy.
An application of the model to the Turkish electrical system
is also presented, where expansion alternatives to the year 2000
are generated. Three criteria were observed: cost, environmen-
tal impact and risk.
1. The changing decision environment in system
planning
The decision making process in electrical power
system investments is undergoing a metamorpho-
sis. The process has become much more complex
in comparison with that of several years ago. The
main reason for this complexity is the emergence
of new dimensions in energy systems analysis in
general, and in electrical systems planning, in par-
ticular.
One of the new dimensions is the widespread
interest in a clean environment. while another is
the concern over nuclear technology. The so-called
* On leave from Bogazici University. Istanbul. Turkey
North-Holland Publishmg Company
European Journal of Operational Research 12 (1983) 159 170
oil embargo of 1973, the sudden increase in energy
prices, and the threat of future energy shortages
have helped in increasing the importance of these
new dimensions. Supply risks associated with oil-
fired power plants have meant more coal and
nuclear plants. These plants, in turn, give rise to
even greater opposition by the environmentalists
and the anti-nuclear groups.
The present atmosphere has already influenced
the planning and operation of power plants. The
plebiscites in Federal Germany, Austria and
Sweden are clear evidences of direct public par-
ticipation in the decision making process. Until
quite recently, decisions in power systems plan-
ning were the responsibility of central electricity
generating authorities, with outside influences re-
stricted to advisory capacity. The basic objective
was economic efficiency, subject to certain techni-
cal considerations, while environmental and social
factors were treated perfunctorily. Today, this pic-
ture is changing very rapidly and different actors
are appearing with different, and even conflicting
objectives. Thus, there is a clear need for the
establishment of new planning procedures and
mathematical methods.
In order to emphasize the scope and magnitude
of the changes, salient features of past and present
decision environments are contrasted in Table 1.
2. The need for a new approach in modelling
It is quite obvious from these comparisons that
a new approach in expansion planning in general,
and in formal modelling in particular, is urgently
needed. In order to develop successful models, we
have to explore the factors that lead to success or
failure.
For a model to be successfully utilized--- or
even at all utilized-it has to satisfy certain re-
quirements. These may be summarized as follows:
(a) Congruenc,e. The characteristics of the power
system. with regard to both the technical as well as
the economic aspects, must be represented. In
0377-2217/83/0000-0000/$03.00 P 1983 North-Holland
160 1. Kaorako@u, G. Kiriltan / Multiobjectioe strategies in power systems planning
Table 1
Features of past and present decision environments
Past
1. Economic factors dominated the decision-making process;
the primary objective generally was the minimization of
costs, and/or the maximization of rate of return.
Present
I. Several factors influence the choice of plant mix, timing and
siting of new power plants. Public concern over risks,
environmental impact. exposure to radiation appear to be
the dominant criteria, while costs are also considered
important.
2. Electricity pricing was primarily based on average genera-
tion cost, with established rates of return on investments.
usually smoothed out over a time horizon.
2. The price of electricity is determined not only by costs. but
also by the demand/cost structure of other sources of
energy. The electricity producing sector is no longer consid-
ered m Isolation, but as a vital part of the economy. whose
activities may play a role on overall growth.
3. Load forecastmg could be carried out with considerable
accuracy. The cost (hence, price) of electricity changed very
slowly, leading to a stable increase in demand. Competition
with other sources of end-use energy was insignificant.
4. Rapid demand growth was consistent with increased
capital-intensive production technology, consumption-ori-
ented life styles, and cheap, abundant natural resources.
i. Uncertainty in future demand for electricity is considerable.
There is a lack of data concerning demand response to large
price changes, especially to increases (m real terms) and
hysteresis effects may be significant.
4. Demand growth rates have dropped significantly, even
beyond rates not fully explained by price elasticity effects.
Long term adjustments are expected to be even more
important than short term impacts. a
5. Electrical system expansion decisions were made by authori-
ties designated for this purpose, and the decisions were
carried out in a hierarchical manner.
5. The number of official and unofficial organizations that
directly and indirectly influence power systems decisions is
considerable. The decision making process has become
highly political and diffuse.
6. Formal models for aiding system decisions were quite
successful, in that they were used extensively and many
decisions were influenced significantly by model results
6. Formal models are not of as much help in todays decision
environment, although the number of models and the
number of persons involved in modelling have increased
considerably.
a A recent study (Electric Load Forecasting) by the Energy Modeling Forum at Stanford indicates that estimates by different groups
(and models) vary by 50% over a 15-year planning horizon [4]
addition to this basic requirement, the model has
to enable adequate representation of decision
makers value system.
(b) Flexibility. Because of the long lead times,
considerable uncertainties may exist in a number
of system elements. Flexibility in model structure
and solution method is highly desirable in evaluat-
ing the consequences of uncertain outcomes.
(c) Transparency. A model that represents the
system and its decision alternatives will stand a
better chance of being used. if it is sufficiently
transparent.
(d) Efficimcy. There is evidence that only effi-
cient (nondominated) investment alternatives are
considered in actual energy system expansions.
The model, therefore, has to be able to eliminate
dominated options from the set of viable decisions
[51-
(e) Accuruc~~. Given the best available data, the
model must be able to generate accurate results;
i.e., the relative magnitude of errors in the solu-
tions should be commensurate with that of the
data, and the way in which the solutions will be
utilized.
In the pre-1970 era, power systems planning
models did in fact comply with these requirements.
Purely economic motives were pursued in evaluat-
ing the alternatives; there were relatively few un-
certainties and the expected range of outcomes
were quite narrow; the techniques and the formu-
lation used in models (such as linear program-
ming, simulation, etc.) were well-understood by
the planning authorities: the models, essentially
because of the rather unidimensional nature of the
objectives. did generate (economically) efficient
alternatives; and the computational facilities al-
I. Kaurakoglu, G. Kiriltan / Multiobjectrvr strategies in power systems plannrng
161
lowed accurate solutions to be found.
The type of information of interest to the deci-
sion makers were: the generation mix, capacities
and timing of new projects, sources of primary
energy supply, reliability and stability of system
operation, marginal costs of resources, etc., and
existing models were capable of supplying this
information, usually with great speed and suffi-
cient accuracy.
The nature of the decision environment. and
consequently, the type of information required
today is considerably different. While the officially
designated authorities are still in need of the type
of information just cited, there has emerged a
growing need for information on the trade-offs
between environmental impact, risks associated
with plant operation, exposure of populations to
pollution of different types, security of energy
supplies, vulnerability to sabotage, appropriate-
ness with respect to technology level and the avail-
ability of skilled personnel, etc. Furthermore, be-
cause of sharp increases in energy costs, the im-
pact of the system on the rest of the economy can
no longer be neglected, and the ranges of uncer-
tain factors have increased quite significantly.
Demands on models are not even limited to the
already tough requirements stated in the preced-
ing. Since a very large number of de facto decision
makers exist, the models have to be just as useful
in serving them, too. They should, for example, be
able to address broad issues, be less complex, and
be quite explicit on implications and consequences
of system decisions. Generated decision alterna-
tives may ultimately be subject to public debate, in
which case the need to be able to see the forest
from the trees becomes even more real.
Admittedly, the demands made on the modell-
ing system in the present decision environment are
extremely difficult to meet. The requirements indi-
cated in the preceding imply a multiple criteria,
dynamic, nonlinear, stochastic. adaptive optimiza-
tion programme which can be easily used and
understood by all relevant bodies and decision
makers! Since it is clearly impossible to incorpo-
rate all these attributes in a modelling system. let
A recent example of the use of a model for public pohcy IS a
study made in Norway, where the further expansion of hydro
resources was under question. Model results were debated bj
representatives of various interest groups and the recom-
mendations were presented to the government [6].
alone a single model, a different path has to be
taken in arriving at optimal, or just acceptable,
power system development strategies.
The approach proposed in the present study is
to decompxe the decision problem to at least two
strata:
(1) at the global level, where the overall strategy
is decided upon, and
(2) at the project level, where individual op-
tions are evaluated. ranked. and decided upon, in
view of the development pattern arrived at in (1).
Decomposing the problem naturally shifts the
emphasis on different characterizations of the
modelling system. At the policy/strategy setting
level, the emphasis should be on the breadth of the
alternatives, consideration of all significant or
potentially significant decision criteria, and the
evaluation of uncontrollable future circumstances.
In other words, congruence, flexibility and trans-
parency aspects should dominate in modelling
global implications, whereas efficiency and accu-
racy considerations should influence modelling the
operational decisions. Viewed in another way, the
former would be analagous to coarse tuning,
while the latter would be analagous to fine tuning,
or zooming-in.
The audiences for the two strata also require the
shifts in emphasis just mentioned. Usually, policy
options are discussed or debated on in circles
where the value systems are the focus of attention,
and the discussants are not necessarily profes-
sionals of power systems planning. At the project
level, however, the technical aspects of program-
ming or sequencing the projects, financing, de-
tailed cash flows, assignments, etc. require the
efforts and cooperation of professionals who are
proficient in using rather complex, elaborate plan-
ning/operating models.
The type of decomposition outlined calls for
extensive feedbacks between the two strata.
Changes in policy perspectives have to be incorpo-
rated in the operational models, while new infor-
mation obtained from individual projects and sys-
tem expansion implications should be used in up-
dating the model(s) used for policy analysis
3. A model for policy analysis
Recognizing the need for a tool to evaluate the
overall development of the electrical power system,
162
I. Kmrakoglu, G. Kiziltan / Multiobjective strategies in power systems planning
we have developed the model presented in the
following. The proposed model is a multiobjective
linear programme of quite small dimensions. The
optimization approach fits naturally with our aim
for nondominated decision alternatives. The lin-
earity assumption may be challenged on two
grounds:
(1) economies of scale considerations, and
(2) resource depletion arguments.
The first criticism is not valid since projects in the
electrical system are usually very large, and cer-
tainly beyond the range where economies would
be affected by size. Resource depletion character-
istics, which would lead to nonlinear costs, on the
other hand, can easily be modelled within the
linear programming formulation, as these would
result in convex cost functions.
Stochastic aspects of the system are not ex-
plicitly modelled, but their influences are analyzed
by means of scenarios. In power systems plan-
ning where the time horizon is of the order of
decades, estimates of future values of parameters
is, at best, a futile exercise. Besides, incorporating
stochastic elements into a model not only causes
computational difficulties, but it also makes the
model more complex and the results more difficult
to interpret.
The model, as presented here, does not include
any interaction between the electrical system and
the users of electricity. 3 Given a certain future
demand for electricity, it tries to determine non-
dominated solutions for the timing and capacity
additions to the generation mix.
As for the method of obtaining nondominated
solutions, the generating technique is utilized. A
fast algorithm is used in determining the vertices
of the solution space, from which all other non-
dominated solutions can be found. (See Appendix
1 for a description.)
A few words of explanation for choosing the
A third source of nonlinearity would be the average load
factors of different types of power plants, assumed to have
constant values in the present model. Deviations of the
optimum load factors from the o prior, specified values.
however, are usually small, and in any case lead to second
order errors in the objective value.
An adaptive control, receding time horizon version of the
model has also been developed. In that modified form, the
demand for a given time period is a function of the price of
electricity, as determined from the solution of the model for
the preceding time period.
generating approach would be in order. As is well
known, there are three approaches in multicriteria
decision processes. These are [ 11:
(i) A priori articulation of preferences, and
generating a solution based on these preferences:
(ii) Progressive articulation of preferences and
arriving at a desirable solution in an interactive
manner;
(iii) A posteriori articulation of preferences; i.e.
generating all relevant solutions, then choosing
from among them.
Each of these processes has its strong as well as
weak points. The first one places a considerable
burden on the decision maker who is forced to
take a de facto decision in an information void.
The last one overcomes that problem by deferring
the decision until all relevant solutions have been
obtained, but creates the computational difficulty
of actually finding the solutions. (For a linear
program with N variables and M equations, the
number of extreme points can be as large as
N !/M!( N - M)!.) Assuming that the solutions
have been found, there still remains the rather
difficult task of analyzing such a large number of
solutions and arriving at a desirable decision [2].
Theoretically, the interactive process overcomes
the disadvantages of both methods, and it may
even reduce the requirements on the formal mod-
elling phase. Considering the nature of the deci-
sion environment in public sector investments,
however, the interactive approach is probably the
least feasible. To begin with, this process calls for
continued cooperation between the analyst and the
decision maker who may be difficult to even iden-
tify, let alone cooperate. Assuming that an expert
may be called in to act as the decision maker,
there still remains the objection that the value
system of the expert influences the outcome
without being made explicit.
The diffuse nature of the decision maker ren-
ders the first method infeasible, too. The third
method is not so easy to apply either, since a large
number of decision alternatives may have to be
considered. On the other hand, by keeping model
size small, the number of solutions can be reduced
significantly. Furthermore. as demonstrated below.
the (nondominated) solutions can be grouped sys-
tematically in order to arrive at only a handful of
sufficiently distinct, meaningful alternatives.
Formally modelling the system expansion deci-
sions poses considerable difficulties even when
I. Kavrako& G. Kizilian / Multiobjective strategies in power sysrems planning 163
only a single criterion, say cost, is specified. A
variety of power plants exists with different fixed
and variable costs, availability factors, capacities,
etc. On the demand side, the load is subject to
seasonal, daily and hourly variations. Further-
more, the expansion programme has to be consid-
ered simultaneously with system operation in order
to avoid suboptimal decisions.
In view of the dimensions and the complexity
of the system, and given the uncertainties in vari-
ous parameters, it is clear that a general purpose
model cannot be constructed. The aim of this
paper is to present a model that allows multi-
criteria analyses of power system decisions from
such a perspective. Especially in view of the chang-
ing nature of the decision environment, the model
should prove to be useful in providing alternative
courses of development which can be elaborated,
discussed, or debated on.
General formulation
The model represents the capacity, generated
electricity, and vintages of power plants in an
aggregate manner and determines the non-
dominated solutions for the criteria specified. The
time horizon is divided into T periods, each of n
years duration, and the power plants (i) are
grouped in terms of the primary source of energy,
such as hydro, coal, nuclear, gas, or oil.
Three criteria are considered: (1) economic cost,
(2) environmental impact, and (3) risk (or, damage
potential); as follows:
T
F, = 2 z (1 + r>--(CP,,P,, + CE,,E,,), (1)
/a t= I
JEJ I=1
(3)
jtJ t=l k=O
where
P is added power capacity (in GW).
E is energy generated (in Twh),
CP and CE are unit costs of power and generated
energy. respectively,
I is environmental impact associated with electric-
ity generation,
R is risk associated with installed power capacity,
r is rate of interest (or opportunity cost),
F,, F,, F3 are objective functions associated with
criteria specified,
J is the set of relevant power plants,
t is time period
The constraints of the model are:
(4)
fp-a,P,t--,3
Vj, t, (7)
E,, 2 EP, ,
Vt forj = renewable resources,
(8)
k=l
, Vt forj = depletable resources.
(9)
In words, these constraints imply, respectively:
- Demands for energy (ED) and power (PD) have
to be satisfied at all times;
- The energy that can be generated from any type
of plant cannot exceed the existing production
capacity, multiplied by the appropriate capacity
factor, f (single period lag is assumed to exist
between the construction and commissioning of a
power plant);
- The additions of new capacity cannot exceed a
certain rate of growth, u, for any type of power
plant;
- Renewable energy is restricted by existing en-
ergy potential (EP) at the time in question;
- For depletable (and non-importable) resources,
the available reserve (ER) cannot be exceeded.
The number of constraints and decision varia-
bles that take place in the general formulation may
appear to be rather large; certainly large enough to
defeat the purpose of generating a sufficiently
small number of decision alternatives. In applying
the model to a particular system, however. some of
these variables and constraints will either be re-
dundant or inapplicable. Thus. expected model
size will. in most cases, be considerably smaller.
The use of the model is illustrated by means of
the case study presented in the following. The
164
I. Kavrako$u, G. Kiziltan / Multiobjective strategies in power systems planning
study is based on a project commissioned by the
Turkish Electricity Authority (TEK) in order to
evaluate power system expansion alternatives to
the year 2000.
4. A cask study
The model described in the preceding section
has been applied to the Turkish electrical system
to generate strategy alternatives, especially for the
near term which may have far-reaching conse-
quences regarding the future state of the plant mix
and distribution network. In order to put the
decision environment in the right perspective, some
information about the system will be useful.
At the present, the total installed power capac-
ity is approximately 5.0 GW. The breakdown of
this into power plants according to the type of
primary energy utilization is as follows:
Hydro 2.2 GW
Coal and Lignite 1.8 GW
Oil 1 .O GW
Nuclear
-
Almost all of this power capacity is intercon-
nected. There are also interconnections with the
USSR at the eastern border, and with Bulgaria at
the western border.
Electrical energy consumption in Turkey during
1981 was approximately 26 Twh. Included in this
are imports from the USSR and Bulgaria amount-
ing to almost 8% of the total. Demand for energy,
on the other hand, was higher than consumption,
and programmed blackouts were called-for to ra-
tion the supply of electricity.
Domestic resources for the supply of electricity
include considerable hydro potential and modest
reserves of coal and lignite. Recoverable oil re-
serves are estimated to be in the range of lOO- 150
million tons, but production capacity is less than 3
million tons per annum. Furthermore, demand for
oil is much higher, around 15 18 million tons per
annum, and no new oil-fired power plants are
considered, since payments for oil imports amount
to more than all earnings from exports.
Nuclear fuel reserves are limited, around 4000
tons of uranium ore, but an organized survey of
deposits has yet to be undertaken. Known deposits
of thorium are given as approximately 400000
tons; however, no plans exist of utilizing this re-
source in the near to medium term.
Coming back to the hydro potential, current
estimates of economically deployable resource
range from 100 TWh to 130 TWh per annum.
Given that only about 9 TWh of that is currently
utilized, there is still quite a good deal to be
exploited.
Lignite reserves are the next most abundant. Of
the 6 billion tons of known or probable reserves,
approximately 2 billion tons are already earmarked
for electricity generation. It is also conceivable
that new lignite reserves are discovered and alloc-
ated for electricity generation.
Coal reserves are estimated at about 900 million
tons, but production capacity is limited. Existing
coal-fired power plants are very old and ineffi-
cient. It is expected that they will be taken out of
service at the earliest opportunity.
Against this background of problems associated
with supply, there is the rapidly growing demand
for electrical energy. Historical rates of electricity
demand increases have been around 10-12s per
annum. Using the average rate of 1 l%, supply
should be of the order of 200 TWh per annum by
the turn of the century, if demand is to be satis-
fied. Even a 10% growth rate leads to a level of
170 TWh per annum, which exceeds the hydro and
(presently estimated) lignite potential combined.
It can be argued that increased energy prices
and reduced rates of economic growth will curb
energy demand anyway; hence the supply problem
is not going to be very severe. On the other hand,
increased fuel prices do not push electricity prices
up as much, since hydroelectricity will remain
relatively inexpensive. Furthermore, increases in
the prices of other energy forms such as oil and
gas may actually cause an increase in electricity
demand, as a result of cross-elasticity effects.
Another factor is that it is easier to increase energy
use efficiency for oil, gas or coal in comparison
with increasing the efficiency of electricity use.
In view of the prevailing conditions, the essen-
tial factors that could influence the development
strategy of the power system were identified as
follows.
Decision alternutioes: Only hydro, nuclear, and
coal/lignite-fired base-load power plants were
considered. Oil-fired plants were eliminated from
the options because of insufficient indigenous re-
sources and high import prices. Gas-fired plants
were also eliminated for similar reasons. Existing
oil-fired plants will probably be utilized in the
I. Kaorako& G. Kiriltan / Multiobjective strategies in power systems planning
165
future as cold reserve and warm reserve capacity.
For peak load duty, existing and planned hydro-
electric plants will be equipped with additional
(peak load) turbines.
Decision criteria: The three criteria expressed in
the preceding section, namely, cost, environmental
impact, and risk, were all considered significant.
The risk issue is not really given much attention
yet, but it may easily become the focal point of
debate in the future. Thus, the risk factor was also
included, based on speculation about likely devel-
opments.
Elements of uncertainty: Three factors were
identified as possible causes of uncertainty in sys-
tem expansion (1) energy and power demand, (2)
exploitation rate of hydro potential, (3) penetra-
tion rate of nuclear energy. The influence of these
factors were examined by solving the model under
different assumptions.
Sensihvity analysis: While the economics crite-
rion can be quantified objectively, environmental
impact and risk criteria are not so easy to quan-
tify. First of all, environmental impact involves
several dimensions, not one. Just as it is difficult
to quantify the impacts of different types of power
plants, it is probably even more difficult to de-
termine the tradeoffs between, for example, land
use, air pollution, radiation, etc. Thus, a sensitivity
analysis was carried out on environmental impact
and risk coefficients in the objective functions.
The objective functions and the constraints of
the model, as applied to the Turkish power system,
took the following forms.
Objective functions for economic cost, environ-
mental impact and risk, respectively:
3 5
F, = 2 2 (1 +O.l)-(CP,p/l+CE,E,,),
(10)
J=l I=1

/=I t=l
(11)
(12)
J-1 I=1 k=O
where, j = 1 for coal, j = 2 for hydro and J -r 3 for
nuclear. (Only economic costs were discounted
over time, since it is difficult to assign opportunity
costs to nonfinancial quantities. Besides, it is not
clear that we may wish to trade present environ-
mental damage and risks with future ones.)
The constraints of the model were
lx E,,
2 ED,, t= 1,5,
(13)
/=I
2 1
x 2 p,,aPD,, t=l,2,
j=l k=O
(14)
P,k 2 ID,, t = 3,5, (19
/=I k=3
r-1
E,,aJ 2 PJk, j== 1, 2, t= 1, 2, (16)
k=O
E,?fJ z <k, j= 1,3,t=3,5,
k=3
P,f a ajpJf- 1,
j=l,2,t=1,5,
P3r~a3P3r-,T
l-3,5,
E,,<EP,, t=3, 5.
(17)
(18)
(19)
(20)
A 30-year time horizon was defined, with 5 time
, periods of 6 years duration. It is sufficient to
consider only the first lo-20 year planning period,
since evaluations can be repeated, and besides,
uncertainties become too great beyond a planning
horizon of 20 years.
In generating alternative system expansion
strategies, the following procedure was observed:
(i) A Base Case was defined and efficient
(nondominated) solutions were found;
(ii) A sensitivity analysis was made by varying
the objective coefficients;
(iii) The effects of uncertain parameters were
analyzed by changing their values;
(iv) Based on the clustering in objective values
and decision variables, the efficient solutions were
grouped in order to generate decision alternatives.
The Base Case scenario involved the assump-
tions given below:
Al. A high rate of energy demand growth rate
(9% per annum).
42. Maximum possible rate of hydroelectric
potential exploitation.
43. Restricted penetration rate for nuclear energy.
The ordinal ranking of power plants in terms of
the three criteria were as shown in Table 2.
The ranking in terms of economic costs was
based on figures quoted for actual projects. En-
vironmental impact, as implied here, relates to
166 I. Kaurako~lu. G. Kiziltan / Multiobjective strategies in power systems planning
Table 2
The ranking of power plant types in terms of the criteria
considered
cost
Invest-
ment
Oper-
ating
Environ- Risk
mental
impact
Highest
Lowest
Nuclear
Hydro
Coal
Coal
Nuclear
Hydro
Coal
Hydro
Nuclear
Hydro
Nuclear
Coal
pollution and land use, under normal operation
conditions. Coal power plants are notorious for
their air pollution property, and hydro plants cover
large areas of land for their reservoirs. While the
two involve different dimensions, the fact that
hydro projects are given higher priority when all
other things are equal, indicates that pollution is
usually more objectionable compared with occupa-
tion of land. Under normal operation conditions,
nuclear plants have very low radioactive emissions,
and they use less land area compared with either
type of plant.
Risk is also difficult to define. It could either be
related to perceived risk, or to estimated risk. In
the eyes of the public, nuclear reactors pose greater
risks compared with hydro plants. Experience to
date, however, indicates that on a per GW in-
stalled power basis, hydro plants pose a greater
danger to humans and the built environment. The
choice between estimated vs. perceived risk, there-
fore, depends on the extent to which policy deci-
sions are influenced by public opinion, or pres-
sure. In this particular study, estimated risks were
used, hence, hydro was considered most risky while
coal was considered safest.
The numerical values for CE and CP were as
given in Table 3.
Table 3
Numerical values of economic costs
Type of CE (investment CP (operation cost Capac-
plant cost, in $,/W) in e:/kWh) ity
factor
Nuclear 1.62 I .25 0.70
Hydro 1.00
-
0.45
Coal 0.85 2.50 0.60
The investment cost values in Table 3 include
interconnection expenditures, based on average
distances from main load centres. (The exclusion
of this investment component would have changed
the ranking in terms of cost, making hydro the
least costly.)
For the environmental impact (I) and risk (R)
coefficients, the sets shown in Table4 were used.
The results of the sensitivity analysis on objec-
tive coefficients indicated that so long as the rank-
ing remained unaltered, the efficient solutions were
practically unaffected. Thus, in the subsequent
scenarios of interest, only set B values were used.
The first scenario of practical interest was ob-
tained by restricting the hydro potential exploita-
tion rate (Assumption A2 above) so that no more
than 33 GW could be developed by the third
period.
The second scenario was obtained by reducing
the rate of growth in electricity demand from 9%
p.a. to 8.5% p.a. (Assumption Al).
The third scenario was obtained by relaxing
assumption A3, so that a greater penetration rate
for nuclear energy was allowed (us in eq. ( 19) was
increased from 1.5 to 4.0; a, = a2 = 2.0 in eq.
(18)).
The summary statistics for the three scenarios
are given in Table 5.
As mentioned in the solution procedure, deci-
sion alternatives were generated for each scenario.
Carrying out such an analysis for scenario #2
yielded the results given in Table 6 and Fig. l(a)-
(d). Four groups of efficient solutions were identi-
fied. Evidently, Group I solutions are associated
with least cost and environmental impact, and
high risk, while exactly the opposite is true for
Group IV solutions. Group II and III solutions
Table 4
Environmental impact (I) and risk (R) coefficients used in
sensitivity analysis
Environmental A B c D Risk
impact ( I )
CR)
Coal 9 3 16 1.2
Hydro 3 2 4 1.1
Nuclear 1 1 1 1.0
HY-
dro
Nu-
clear
Coal
I. Kavrako& G. Kiziltan / Multiobjective strategies in power systems planning
Table 5
Summary statistics of efficient solutions for the three scenarios
167
Scenario Number
of
solutions
Ranges of objective values
Economic Environmental
cost impact
Potential
damage
Total installed capacity ranges
at 3rd period (in GW,)
Hydro Coal Nuclear
1 29 1289-1536 1388-1737 41-137 4-33 11 -27.8 l-2.5
2 19 1101-1311 1184-1533 37-133 4-33 8.2-23.7 I-2.5
3 28 1097- 1336 1022-1533 37-156 4-33 5.3-25 l-5
-
imply compromise alternatives. (The full table of
solutions is given in the Appendix).
Despite the rather large number of solutions,
the ranges of outcomes for plausible expansion
schemes are quite narrow. In addition, the out-
comes are not so difficult to group, as demon-
1982 1988 1994 2000
(Group I solutions)
(Group II solutions)
GW
1982 1988 1994 2ooo 1982 1988 1994 2000
strated in this example. As a result, the decision
maker is offered only a handful of choices, de-
pending on his preferences. Furthermore, the
tradeoffs between different objectives can be easily
evaluated. For example, by selecting a solution
from Group II rather than Group I, risk is reduced
GW
30
I
b)
GW
30
t
Id)
(Group I I I solutions)
Fig. 1. Capacity growth of power plants for different groups of solutions.
(Group IV solutions)
168
Table 6
I. Kavrako@u, G. Kiziltan / Multiobjective strategies in power systems planning
Summary statistics for scenario #2
Number
of
solutions
Ranges of objective values
Economic Environmental
cost impact
Potential
damage
Total installed capacity ranges
at 3rd period (in GW,)
Hydro Coal Nuclear
5 1101-1137 1184-1291 93-133 28-33 8.2-13.6 l-2.5
5 1162-1223 1304- 1436 S4- 81 12-21.5 13.8-20.5 l-2.5
5 1243-1259 1436-1463 46- 49 S- 9.8 20.8-21.7 l-2.5
4 1277-1311 1487- 1533 37- 41 4- 6.4 23.7-25 l-2.5
Table 7
Ranges of representative objective weights (A values) for each
solution group
Group A,
A*
number Economic Environmental
cost impact
x3
Risk
I 0.18-0.40 0.04-0.33 0.33-0.64
II 0.11-0.19 0.02-O. 14 0.73-0.77
III 0.04-0.19 0.02-0.12 0.75-0.85
IV 0.04-0.08 0.05-O. 11 0.85-0.86
Environmental
Impact
I 1 1 I I
1100 1120 1140
Fig. 2. Trade-off function for cost and environmental impact.
(Numbers are the ratios (X,/h,) of implied weights for cost.
A,. and environmental impact, X,, for different range> elf
efficient solutions.)
by a factor of 2, while other costs increase only
marginally.
Another way of evaluating model results is to
analyze the implied weights of different objec-
tives in the solutions. This additional information
is valuable especially for those more familiar with
the classical approach of assigning weights (A) to
different criteria.
Table 7 gives the ranges of X-values for the four
groups of solutions mentioned earlier. Here also it
can be seen that Group I solutions correspond to
greatest weight to economic cost and environmen-
tal impact, while Group IV solutions correspond
to greatest weight to risk.
Tradeoff functions between any two criteria can
be generated directly by using the model. One
such function is displayed in Fig. 2 for the tradeoff
between economic cost and environmental impact.
The computation times required to obtain a set
of solutions-for the size of model described here
with 27 variables and 36 constraints-is of the
order of one minute of computer time on a Univac
1106.
5. Concluding observations
Multicriteria analysis and decision making in
public sector projects is, at best. a difficult under-
raking. Thus, any method or technique developed
ivith the purpose of application has to satisfy
rather tough requirements.
The modelling approach described, namely that
of generating efficient decision alternatives, is pro-
posed not so much because it is the ideal tech-
nique, but because the alternatives (interactive
methods or prior articulation of preferences) are
I. Kaorakoglu, G. Kiziltan / M&objective strategies in power systems plannrng 169
hardly feasible in the emerging decision environ-
ment.
The mathematical formulation does, however,
combine certain desirable characteristics such as
congruence, flexibility, transparency and the abil-
ity to generate sufficiently accurate solutions. Im-
proving upon only some of these attributes, at a
loss in others, would not increase the chances of
success in applying the model, since these attri-
butes constitute a whole.
The demands made on the model of the system
actually call for a multicriteria decision process in
itself. It would be desirable, for example, to in-
clude details of lo-15 different types of power
plants instead of only a few; to define time periods
yearly instead of in terms of several years; to
divide the load duration curve into 8- 10 segments
instead of only considering just energy and total
power demands; to consider all relevant criteria
rather than only three, etc. However, the resulting
mammoth-sized model cannot be solved in any
reasonable period of time with existing computers,
nor any meaning can be made out of the near-in-
finite number of efficient solutions.
The modelling technique and the solution pro-
cedure employed in this study offer several ad-
vantages, especially when the characteristics of the
decision environment are considered. A very sig-
nificant aspect of the model is that it will yield
reliable results even when only qualitative infor-
mation exists. Hence, it is possible to accommod-
ate dimensions which are otherwise difficult to
model.
The model allows the decisions to be analyzed
from three points of view. One of these is to group
efficient solutions based on the outcomes of the
decision variables. The second approach is to group
the solutions based on the relative magnitudes of
objective weights. Yet another approach is to group
the solutions based on the relative magnitudes of
the objective values, as done in this study. This is
also the most direct approach, since the desirabil-
ity of the alternatives are measured by the values
of the objective functions at the efficient solutions.
Appendix 1. The multiobjective linear programming
algorithm
The algorithm is based on exploiting the equiva-
lence of the multiobjective linear programme to
the multiparametric linear programme. With minor
modifications, the algorithm is along the lines
given by Ecker and Kouada [3]. The modifications
are
(i) The initial efficient vertex is found by
minimizing one of the objectives, say objective k;
(ii) At each efficient vertex, only adjacent
vertices with nondecreasing values of objective k
are checked for efficiency;
(iii) The option of specifying intervals on the
parametric objective weights is incorporated. (This
option was not used in the present application.)
Since the algorithm is initialized by minimizing
objective k, at each step it is sufficient to check
only adjacent vertices with nondecreasing values
of objective k for efficiency. In this way, each
efficient edge is identified only once, along the
direction of decrease of objective k. This proce-
dure avoids duplications of effort and increases
computational efficiency of the algorithm.
The notion of specifying intervals on the para-
metric objective weights is due to Steuer [7]. In his
interval criterion weights method, Steuer uses the
interval endpoints of the objective weights to de-
,
fine new objectives and considers the solution of
the resulting equivalent multiobjective problem.
There, all possible endpoint combinations are enu-
merated and each combination is used to weight
the objectives to obtain one new objective. The
approach taken in the present algorithm is simply
augmenting the subproblem for the efficiency
check by the constraints implied by the specified
intervals on the parametric objective weights.
The algorithm is coded in FORTRAN. Cur-
rently the maximum problem size is limited to 50
variables 50 constraints and 5 objectives.
References
[l] J.L. Cohen, MultlobJectrve Programming md Plunnrng
(Academic Press, New York, 1978).
[2] E.A. Cherniavsky, MultiobJective energy analysis, in: B.
Bayraktar et al.. Eds., Energy Policy PIannrng (Plenum. New
York, 1981).
[?I J.G. Ecker and I.A. Kouada. Finding all efficient extreme
putnts for multiple objective linear programs. Murh. Pro-
gramming 14 (1978) 243-261.
14) EMF-Energy Modelling Forum. Electric load forecasting.
hMF Report 3, Vol. 1. Sttnford (1979).
i 5 / I. Kavrakoglu, Decision analysis in the energy xctor. 4ppl.
Math. Modeliq 4 (6) (1980).
Ih! D Nunn and 1~. Ervik. The Norwegian electro-mdustry. rn:
I Kavrakoglu, Ed.. Mathemarical Modelling of Energ, Sys-
ferns (SiJthoff and Noordhoff. Holland, 1981).
1 I] K.E. Steuer, Multiple objective linear programming wtth
interval criterion weights, Managentent Sci. 23 (1976) 305-
316.
170 I. Kavrakoglu, G. Kiziltan / Multiobjective strategies in power systems planning
Appendix 2
Efficient solutions for scenario # 2
Group Solution
number number
Objective values Total installed capacity
at 3rd period (in GE,)
Economic Environmental Potential
cost impact damage Hydro Coal Nuclear
I 1 1101 1184 133 33
2 1121 1214 109 33
19 1123 1260 105 33
3 1135 1245 97 28
18 1137 1291 93 28
4 1162 1304 81 21.5
9 1176 1350 71 18.6
10 1219 1410 55 12
5 1223 1390 58 12
11 1223 1436 54 12
III 12 1243 1463 48 9.8
16 1244 1444 49 9.2
17 1255 1458 46 8
6 1256 1436 49 8.2
7 1259 1439 48 8
IV 13 1277 1504 41 6.4
15 1303 1507 38 4
14 1308 1533 37 4
8 1311 1487 40 4
8.2 2.5
10.8 2.5
12.3 1
12.1 2.5
13.6 I
13.8 2.5
15.5 2.5
19.3 2.5
19.3 2.5
20.5 1
21.7 1
20.8 2.5
21.5 2.5
21.5 2.5
21.5 2.5
23.7 1
23.7 2.5
25 I
23.7 2.5
Representative objective weights associated with each solution
in scenario #2
Solution A,
x2 x3
number Economic Environmental Potential
cost impact damage
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
0.33
0.24
0.18
0.14
0.11
0.06
0.04
0.04
0.12
0.11
0.19
0.19
0.33 0.33
0.24 0.51
0.18 0.64
0.14 0.73
0.13 0.77
0.12 0.82
0.10 0.85
0.11 0.85
0.12 0.76
0.13 0.76
0.02 0.75
0.02 0.75
0.05 0.86
0.05 0.86
0.10 0.86
0.09 0.8 1
0.10 0.85
0.05 0.64
0.04 0.56
Note: X7=,X, may not add up to 1.00 exactly, due to rounding
off.