Hierarchical market-based optimal planning of transmission network and wind-storage hybrid power plant

Coupling renewable energy sources (RES) such as wind farms with energy storage systems (ESSs) to form a hybrid power plant (HPP) has gained increasing attention. However, its investment profitability is closely associated with its capacity configuration, site location, grid network, and market-clearing outcomes. To study the HPP's planning strategy and its interaction with the transmission system operator (TSO), this paper proposes a tri-level coordinated planning scheme for transmission networks and a profit-driven wind-storage hybrid power plant (WSHPP) in the electricity market. The upper level is the transmission network expansion problem managed by the TSO, which responds to the investment decision of the WSHPP. The middle level determines the optimal capacity and site location of the WSHPP to maximize net benefits given transmission expansion schemes and prices from the third level. In the third level, the independent system operator (ISO) solves a scenario-based economic dispatch problem to provide locational marginal prices with fixed upper-level and middle-level decisions. The proposed tri-level hierarchical optimization model is computationally intractable because of its multi-level structure and binary/integer variables at the upper/middle level. A value-function reformulation and sample-based algorithm is implemented to solve the tri-level planning model and the convergence is proved. Numerical experiments on two typical test systems show the effectiveness of the proposed planning scheme and the tractability of the solution algorithm.