A new approach to evaluate generation capacity bids

Decision making on capacity addition has become highly complex as the power industry worldwide is undergoing regulatory changes. This paper argues the use of mathematical models to aid the decision makers to select generation capacity bids. A three-stage optimization scheme is developed to accurately estimate the benefits from a specific project. Multiobjective framework to capture both quantitative as well as qualitative information (through expert judgement) has been employed. The model can be used to estimate the marginal benefit from a project and calculate a composite index to rank them in order of their desirability. A case study for modified IEEE 30-bus test system illustrates the methodological issues.