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Co-Optimizations for Electricity and Natural Gas Sectors Introduction to Concepts, Theory, Working Examples Dr. Randell M. Johnson, P.E. October 28th & 29th, 2013 Co-Optimizations for Natural Gas and Electric Sectors • • • • • • • Optimizations Methods Co-Optimization Generation and Transmission Expansion Co-Optimization of Energy and Ancillary Services Co-Optimization Electric and Nat Gas Production Cost Co-Optimization of Nat Gas and Electric Markets with Co-Optimization of Ancillary Services Co-Optimization Electric and Nat Gas Capacity Expansion Integrated Datasets 2 Applications of Co-Optimization Tools 3 Optimization Methods PLEXOS Optimization Methods • • • • Linear Relaxation - The integer restriction on unit commitment is relaxed so unit commitment can occur in non-integer increments. Unit start up variables are still included in the formulation but can take non-integer values in the optimal solution. This option is the fastest to solve but can distort the pricing outcome as well as the dispatch because semi-fixed costs (start cost and unit no-load cost) can be marginal and involved in price setting Rounded Relaxation - The RR algorithm integerizes the unit commitment decisions in a multi-pass optimization. The result is an integer solution. The RR can be faster than a full integer optimal solution because it uses a finite number of passes of linear programming rather than integer programming. Integer Optimal - The unit commitment problem is solved as a mixed-integer program (MIP). The unit on/off decisions are optimized within criteria. Stochastic Programing - The goal of SO is to find some policy that is feasible for all (or almost all) of the possible data instances and maximize the expectation of some function of the decisions and the random variables 17 July, 2015 Energy Exemplar 5 PLEXOS: Stochastic Optimization 6 Stochastic Optimization (SO) • • Fix perfect foresight issue – Monte Carlo simulation can tell us what the optimal decision is for each of a number of possible outcomes assuming perfect foresight for each scenario independently; – It cannot answer the question: what decision should I make now given the uncertainty in the inputs? Stochastic Programming – • The goal of SO is to find some policy that is feasible for all (or almost all) of the possible data instances and maximize the expectation of some function of the decisions and the random variables Scenario-wise decomposition – The set of all outcomes is represented as “scenarios”, the set of scenarios can be reduced by grouping like scenarios together. The reduced sample size can be run more efficiently 7 Stochastic Variables • Set of uncertain inputs ω can contain any property that can be made variable in PLEXOS: – – – – – – Load Fuel prices Electric prices Ancillary services prices Hydro inflows Wind energy, etc • Number of samples S limited only by computing memory • First-stage variables depend on the simulation phase • Remainder of the formulation is repeated S times 8 20 Sample input distribution for variables Wind Solar Night Daily Periods Day Morning Load 9 SO Theory • • • • • , Continued Where the first (or second) stage decisions must take integer values we have a stochastic integer programming (SIP) problem SIP problems are difficult to solve in general Assuming integer first-stage decisions (e.g. “how many generators of type x to build” or “when do a turn on/off this power plant”) we want to find a solution that minimises the total cost of the first and second stage decisions A number of solution approaches have been suggested in the literature PLEXOS uses scenario-wise decomposition ... 10 SO Theory , Continued 𝑥 and 𝑦 represents the first and second-stage decisions resp. 𝜔 represents the uncertain data 𝑞, 𝑊, ℎ, 𝑇 are a realisation of the random data R and Z denote reals and integers respectively min 𝑐 𝑇 𝑥 + E 𝑄 𝑥, 𝜔 s.t. 𝐴𝑥 = 𝑏 𝑛 −𝑝 𝑝 𝑥 ∈ R+1 1 × Z+1 2-stage SIP Formulation where 𝑄 𝑥, 𝜔 ≔ min 𝑞 𝑇 𝑦 s.t. 𝑊𝑦 = ℎ − 𝑇𝑥 𝑛 −𝑝 𝑝 𝑦 ∈ R +2 2 × Z+2 11 SO Theory , Continued Assume the distribution 𝜔 of uncertain inputs can be evaluated as discrete scenarios 𝜔1 , 𝜔1 , … , 𝜔𝑆 having probabilities 𝑝1 , 𝑝2 , … , 𝑝𝑆 the two-stage SIP can be formulated: 𝑆 𝑝𝑠 𝑐 𝑇 𝑥𝑠 + 𝑞𝑠𝑇 𝑦𝑠 Minimise 𝑠=1 subject to 𝐴𝑥𝑠 = 𝑏 𝑠 = 1, … , 𝑆 𝑇𝑠 𝑥𝑠 + 𝑊𝑠 𝑦𝑠 = ℎ𝑠 𝑠 = 1, … , 𝑆 𝑛 −𝑝 𝑝 𝑥𝑠 ∈ R +1 1 × Z+1 𝑠 = 1, … , 𝑆 𝑛 −𝑝 𝑝 𝑦𝑠 ∈ R+2 2 × Z+2 𝑠 = 1, … , 𝑆 𝑥1 = 𝑥2 = ⋯ = 𝑥𝑆 Scenario wise Decomposition of 2-stage SIP Formulation 12 H1 H2 H3 H1 H2 M3 H1 M2 H3 H1 M2 M3 M3 H1 M2 L3 L3 M1 H2 H3 M1 H2 H3 P(1) M1 H2 M3 M1 H2 M3 P(2) M1 M2 H3 M1 M2 H3 P(3) M1 M2 M3 M1 M2 M3 M1 M2 L3 M1 M2 L3 M3 M1 L2 M3 L1 M2 H3 L3 M1 L2 L3 L1 M2 M3 L1 M2 H3 L1 M2 L3 L1 M2 M3 L1 M2 M3 L1 M2 L3 L1 M2 M3 L1 L2 L3 H3 H2 M3 H1 H3 M2 Initial “high” H3 H2 M3 H3 M1 M2 M3 L3 L2 Initial “mid” H3 M2 L2 M3 L3 L2 Initial “low” Initial Problem M3 L3 Scenarios Sample Reduction p(9) 13 Day-ahead Unit Commitment , Continued Stochastic Optimisation: Two stage scenario-wise decomposition Stage 1: Commit 1 or 2 or none of the “slow” generators Stage 2: There are hundreds of possible wind speeds. For each wind profile, decide the optimal commitment of the other units and dispatch of all units Reveal the many possible outcomes Take the optimal decision 2 Expected cost of decisions 1+2 Take Decision 1 Is there a better Decision 1? RESULT: Optimal unit commitment for “slow” generator 14 Co-Optimization of Generation and Transmission Expansion Overview: Generation Transmission Expansion Planning • Focus on long-term studies with decision variables spanning many years: • Co-optimize generation new builds and retirements with: – Transmission line builds e.g. AC or DC lines; and – Transmission interface upgrades; – Physical contract purchases (generation or load) 16 Objective Function • Object function minimizes (expected value of) the net present value (NPV): – Cost of new builds: • Generator, DC Line, AC Line, Interface, Physical Contract • Cost of retirements: • Generator, DC Line – Fixed operating costs – Variable operating (production) costs – Net cost of external market trades 17 Optimal Decisions under Uncertainty • New investments: – Where? • Location – When? • Timing – How much? • Sizing • Retirements… – When? • Timing – How much? • Number of units • Uncertainties: – – – – – – Load Fuel prices Hydro inflows Wind energy Outages etc • Constraints: – – – – Reliability (LOLP) Emissions Fuels etc 18 Objective Function Components • For any combination of expansion decisions x we have two types of costs: 1. Capital costs C(x): – Cost of new builds – Cost/savings from retirements 2. Production costs P(x): – Cost of operating the system with any given set of existing and new builds and transmission network – Notional cost of unserved energy 19 Optimization Cost $ Objective: Minimize net present value of forward-looking costs (i.e. capital and production costs) Total Cost = C(x) + P(x) Investment cost/ Capital cost C(x) Production Cost P(x) Minimum cost plan x Investment x 20 Illustrative Formulation Generation Transmission Expansion Co-Optimization 𝑌 𝐼 Minimize 𝑇 𝐼 𝐵𝑢𝑖𝑙𝑑𝐶𝑜𝑠𝑡𝑖 × 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 + 𝑦=1 𝑖=1 subject to 𝑃𝑟𝑜𝑑𝐶𝑜𝑠𝑡𝑖 × 𝑃𝑟𝑜𝑑𝑖,𝑡 + 𝑆ℎ𝑜𝑟𝑡𝐶𝑜𝑠𝑡 × 𝑆ℎ𝑜𝑟𝑡𝑎𝑔𝑒𝑡 𝑡=1 𝑖=1 𝐼 Supply and Demand Balance: 𝑃𝑟𝑜𝑑𝑖,𝑡 + 𝑆ℎ𝑜𝑟𝑡𝑎𝑔𝑒𝑡 = 𝐷𝑒𝑚𝑎𝑛𝑑𝑡 ∀𝑡 𝑖=1 Production Feasible: 𝑃𝑟𝑜𝑑𝑖,𝑡 ≤ 𝑃𝑟𝑜𝑑𝑀𝑎𝑥𝑖 ∀𝑖, 𝑡 Expansion Feasible: 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 ≤ 𝐵𝑢𝑖𝑙𝑑𝑀𝑎𝑥𝑖,𝑦 ∀𝑖, 𝑦 Integrality: 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 𝑖𝑛𝑡𝑒𝑔𝑒𝑟 Reliability: 𝐿𝑂𝐿𝑃 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 ≤ 𝐿𝑂𝐿𝑃𝑇𝑎𝑟𝑔𝑒𝑡 ∀𝑦 This simplified illustration shows the essential elements of the mixed integer programming formulation. Build decisions cover generation, and transmission as does supply and demand balance and shortage terms. The entire problem is solved simultaneously, yielding a true co-optimized solution. 21 Algorithms • Chronological or load duration curves • Large-scale mixed integer programming solution • Deterministic, Monte Carlo; or • Stochastic Optimization (optimal decisions under uncertainty) 22 Generation Expansion Capabilities • • • • • • • • Building new generating plant Retiring existing generating plant Multi-stage projects e.g. GT before CCGT Thermal or hydro with storage Multi-annual emission caps Fuel-supply policies and constraints Pumped storage Other renewables: – Wind, solar, wave, etc 23 Transmission Expansion Capabilities • Building new DC transmission lines • Retiring existing DC transmission lines • Building new AC transmission lines: – Dynamic changes in impedance matrix • Multi-stage transmission projects • Transmission Interface expansion 24 Energy and Ancillary Services Co-Optimization Ancillary Services Products • Integration of the intermittency of renewables requires study of CoOptimization of Ancillary Services and true co-optimization of Ancillary services is done on a sub-hourly basis in real time markets • More and more the last decade, it has been recognised that AS and Energy markets are closely coupled as the same resource and same capacity have to be used to provide multiple products when justified by economics. • The capacity coupling for the provision of Energy and AS, calls for joint optimisation of Energy and AS markets that differs from market to market due to different regional reliability standards and operational practises. 26 Co-Optimization Ancillary Service Products in Wholesale Markets Reliable and Secure System Operation requires the following product and Services (not exhausted): 1. Energy 2. Regulation & Load Following Services – AGC/Real time maintenance of system’s phase angle and balancing of supply/demand variations. 3. Synchronised Reserve – 10 min Spinning up and down 4. Non-Synchronised Reserve – 10 min up and down 5. Operating Reserve – 30 min response time 6. Voltage Support – Location Specific 7. Black Start – (Service Contracts) 27 Solving SC UC/ED using MIP Unit Commitment and Economical Dispatch can be formulated as a linear problem (after linearization) with integer variables of generator on-line status Minimize Cost = generator fuel + VOM cost + generator start cost + contract purchase cost – contract sale saving + transmission wheeling + energy / AS / fuel / capacity market purchase cost – energy / AS / fuel / capacity market sale revenue Subject to: Energy balance constraints Operation reserve constraints Generator and contract chronological constraints: ramp, min up/down, min capacity, etc. Generator and contract energy limits: hourly / daily / weekly / … Transmission limits Fuel limits: pipeline, daily / weekly/ … Emission limits: daily / weekly / … Others 28 Illustrative Formulation of Energy/AS Co-optimization Min ckt g kt sckt (okt okt 1 ) acm,t k asm,t k m k t subject to g l loss t j t k t k k k as t m, k t (System Energy Balance) j t, m (AS constraint for AS m ) asmt,min k t,max t t t asm,t,min k ok asm, k asm, k ok t, k,m (Generation AS Capacity Lim its) g kt,MIN okt g kt asm,t k g kt,MAX okt t, k (Generation and AS Capacity Lim its) m GeneratorRam pRate Constraints GeneratorMin Up/DownTim e Constraints GeneratorEnergyConstraints Transm ission Constraints Fuel Constraints Em issionand Other Constraints 29 Security Constrained Unit Commit /Economic Dispatch • • SCUC / ED consists of two applications: UC/ED and Network Applications (NA) SCUC / ED is used in many power markets in the world include CAISO, MISO, PJM, etc. Unit Commitment / Economic Dispatch (UC/ED) Resource Schedules in 24 hours for DA simulations, or in sub-hourly Energy-AS Co-optimization using for RT simulations Mixed Integer Programming (MIP) enforces resource chronological constraints, transmission constraints passed from NA, and others. Network Applications (NA) DC-Optimal Power Flow (DC-OPF) solves network power flow for given resource schedules passed from UC/ED enforces transmission line limits enforces interface limits Solutions include resource on-line status, loading levels, AS provisions, etc. Violated Transmission enforces nomograms Constraints Flow Diagram of Sequential DA/RT Modelling and Simulation Sequential DA/RT is Optional Additional Feature for Simulation 31 PLEXOS Example: Sub-Hourly Energy and Ancillary Services Co-Optimization 32 PLEXOS Base Model Generation Result • Peaking plant in orange operating at morning peak • Some displacement of hydro to allow for ramping • Variable wind in green 33 Spinning Reserve Requirement • CCGT now runs all day to cover reserves and energy • Coal plant 2 also online longer • Oil unit not required • Less displacement of hydro generation for ramping 34 PLEXOS higher resolution dispatch – 5 Minute Sub-Hourly Simulation • Oil unit required at peak for increased variability • Increased displacement of base load to cover for ramping constraints 35 Energy/AS Stochastic Co-optimisation!!! So far the model example has had perfect information on future wind and load requirements. Uncertainty in our model inputs should affect our decisions – Stochastic optimisation (SO) • The goal of SO then is to find some policy that is feasible for all (or almost all) the possible data instances and maximise the expectation of some function of the decisions and the random variables What decision should I make now given the uncertainty in the inputs? 36 Energy/AS Stochastic Co-optimisation • Even though load lower (wind unchanged) more units must be committed to cover the possibility of high load and low wind • These units must then operate at or above Minimum Stable Level 37 Co-Optimization of Electric and Natural Gas Production Cost Illustrative Formulation of Co-Optimization of Natural gas and Electricity Markets • Objective: – Co-Optimization of Natural Gas Electricity Markets • Minimize: – Electric Production Cost + Gas Production Cost + Electric Demand Shortage Cost + Natural Gas Demand Shortage Cost Subject to: – [Electric Production] + [Electric Shortage] = [Electric Demand] + [Electric Losses] – [Transmission Constraints] – [Electric Production] and [Ancillary Services Provision] feasible – [Gas Production] + [Gas Demand Shortage] = [Gas Demand] + [Gas Generator Demand] – [Gas Production] feasible – [Pipeline Constraints] – others • 39 PLEXOS Example: Co-Optimization of Natural Gas and Electricity Markets for simplified northeast model 40 New England and New York Markets • Created a simple dataset to proxy the NY and New England electricity and natural gas markets. • Several simplifying assumptions: – Assumed aggregation of gas production – Simplified both the natural gas and electricity network in New York State and New England. – Simplified the complexity of generators and interconnections. Integrated Gas and Electric Model Northeast Market Simplified Assumptions • Zonal electric market with limited transmission – New York 3 zones: New York City and Long Island; Upstate NY and Western NY. – New England 3 zones: North (ME, NH, VT); and West (MA, CT & RI); Central (eastern MA). • 4 natural gas production regions: – – – – • • Alberta Canada with an interconnection at the Niagara Hub; Waddington and Montreal; Gulf coast with an interconnection in New Jersey; Shale Production in Mid-Western States with interconnection in Pennsylvania; and A small natural gas production in upstate New York. 2 Natural Gas Markets: New York and New England. 5 adjoining electrical markets: – PJM; NY, Ontario; Quebec and New England. • Daily natural gas load based on EIA monthly demand. Integrated Gas and Electric Model Simplified Combined Electric & Natural Gas Model Gas Montreal Electric Montreal Wadding ton North NE To Alberta Niagara Hub North NE Upstate West Ontario West West NE Upstate West NE PJM West NJ Hub Leidy PJM East To Shale To Gulf NYC NYC Central NE Central NE Simplified Model Inputs/Results NY and New England Gas Demand Natural gas demand (nongeneration) provided by EIA. Generation gas demand calculated by PLEXOS. Integrated Gas and Electric Model Simplified Model Inputs/Results Northeast Natural Gas Prices Natural Gas prices at Leidy, Niagara Hub and Transco Z6 are used as the production costs for the natural gas into NY and New England. Citygate prices are calculated by PLEXOS. Integrated Gas and Electric Model Simplified Model Results Daily Pipeline Flows Natural Gas production serving the Northeast: NY, Shale; Gulf; and Canada production. Calculated by PLEXOS. Integrated Gas and Electric Model Simplified Model Results NY Electrical Load Integrated Gas and Electric Model Simplified Model Results New England Electrical Load Integrated Gas and Electric Model Simplified Model Results NY Electric LBMP Nat Gas Network Constraints Electrical Network Constraints Electric Prices for • • • NYC (Zones J-K); Upstate (Zones F-I); West (Zones A-E). Prices in Winter influenced by natural gas shortages. Summer prices reflect electric constraints calculated by PLEXOS. Integrated Gas and Electric Model Simplified Model Results ISONE LMP Electric Prices for ISONE. Nat Gas Network Constraints Electrical Network Constraints Prices in Winter influenced by natural gas shortages. Summer prices reflect shortages calculated by PLEXOS. Simplified Model Results Northeast Fossil Fuel Consumption in MMBtu Northeast fossil fuel consumption calculated by PLEXOS. Integrated Gas and Electric Model Simplified Model Results Northeast Fossil Fuel Generation in MWh Northeast fossil fuel consumption calculated by PLEXOS. Integrated Gas and Electric Model Co-Optimization of Natural Gas and Electric Markets with Co-Optimization of Ancillary Services Co-Optimization of Gas Electric Markets with Co-Optimization of Ancillary Services • • • • Electric: Security Constrained Unit Commitment and Economic Dispatch (Nodal or Zonal) Gas: Production Cost Market Clearing Solved with LP (Nodal or Zonal) Co-Optimization of Gas and Electric Clearing Co-Optimization of Ancillary Services • Study Mode Capability: – – – – – – • Impacts of Gas Constraints on Electricity Market Increased electrical sector reliance on Natural Gas fired generation on Natural Gas Network Impacts of renewable generation on Natural Gas Network Impacts of electrical demand load ramping with Gas units on Natural Gas Network Integration of Public Policy Gas and or Electric Contingencies Extensions: – – – – – – Co-Optimization of Gas Electric Capacity Expansion Flexibility Assessments Demand Response Evaluations of Energy Storage for Gas, Electric, storage of other fuels, and dual fuel Integration of Renewables Benefit Analysis to Gas and or Electric Rate Payers Illustrative Formulation of Co-Optimization of Natural Gas and Electric Markets with Co-Optimizations of Ancillary Services • Objective: – Co-Optimization of Gas Electric Markets with Co-Optimization of Ancillary Services • Minimize: – Electric Production Cost + Gas Production Cost + Electric Demand Shortage Cost + Natural Gas Demand Shortage Cost + Ancillary Services Shortage Cost • Subject to: – [Electric Production] + [Electric Shortage] = [Electric Demand] + [Electric Losses] – [Ancillary Service Provision] >= [Ancillary Services Requirements] – [Transmission Constraints] – [Electric Production] and [Ancillary Services Provision] feasible – [Gas Production] + [Gas Demand Shortage] = [Gas Demand] + [Gas Generator Demand] – [Gas Production] feasible – [Pipeline Constraints] – others 55 Ancillary Services • Contingency Reserves: Spinning reserve and Non-Spinning reserve – • Regulation Reserve: Regulation up / down – • Cover forced outages of generators or transmission lines Cover load / renewable variability at second interval Flexibility Reserve: Flexibility up / down – Cover load / renewable variability and uncertainty at the minute interval • For regulation and flexibility reserves, can define the reserve requirement based on the load / renewable generation variability and uncertainty • The reserve provisions from generators are capped by the generator dispatchable and un-used capacity, and the ramp rate • Co-optimization of the energy-AS mimic scheduling software to minimize the total system cost • Shortage of generation capacity or ramp capacity will show in the reserve provision shortfall (checking the ramp capacity adequacy) Natural Gas Network • Natural Gas Demand – – • Well Heads – – • Input well head production cost Aggregate well heads in areas Pipelines – – – • Method calculates the gas demand required at natural gas pipeline location from generation based on the generator heat rate. Enter separate gas demands associated with a specific natural gas pipeline node of commercial, industrial and residential gas. Constraints Flow Line Pack Gas Storage – – Storage Capacity Nat Gas Storage Inventory Co-Optimization Electric and Nat Gas Capacity Expansion Overview: Gas Electric Expansion Planning • Focus on long-term studies with decision variables spanning many years: • Co-optimize generation new builds and retirements with: – – – – – Transmission line builds e.g. AC or DC lines; and Transmission interface upgrades; Physical contract purchases (generation or load) Natural gas pipeline and storage expansion And others such as ancillary services 59 Gas Expansion Capabilities • • • • • Develop new Gas Fields Build new Gas Nodes and Pipelines Build new Gas Storage Retire Gas Node, Pipeline, Storage Co-optimize electric production/expansion with natural gas production/expansion 60 Objective Function • Object function minimizes (expected value of) the net present value (NPV): – Cost of new builds: • Generator, DC Line, AC Line, Interface, Physical Contract, Gas Field, Pipeline, Storage – Cost of retirements: • Generator, DC Line – Fixed operating costs – Variable operating (production) costs – Net cost of external market trades 61 Objective Function Components • For any combination of expansion decisions x we have two types of costs: 1. Capital costs C(x): – Cost of new builds – Cost/savings from retirements 2. Production costs P(x): – Cost of operating the system with any given set of existing and new builds and transmission network – Notional cost of unserved energy 62 Optimization Objective: Minimize net present value of forward-looking costs (i.e. capital and production costs for electric and gas sectors) Cost $ Total Cost = Ce(x) + Pe(x) + Cg(x) + Pg(x) Investment cost/ Capital cost Ce(x)+Cg(x) Production Cost Pe(x) + Pg(x) Minimum cost plan x Investment x 63 Illustrative Formulation Nat Gas Electric Expansion Planning 𝑌 𝐼 Minimize 𝑇 𝐼 𝐵𝑢𝑖𝑙𝑑𝐶𝑜𝑠𝑡𝑖 × 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 + 𝑦=1 𝑖=1 subject to 𝑃𝑟𝑜𝑑𝐶𝑜𝑠𝑡𝑖 × 𝑃𝑟𝑜𝑑𝑖,𝑡 + 𝑆ℎ𝑜𝑟𝑡𝐶𝑜𝑠𝑡 × 𝑆ℎ𝑜𝑟𝑡𝑎𝑔𝑒𝑡 𝑡=1 𝑖=1 𝐼 Supply and Demand Balance: 𝑃𝑟𝑜𝑑𝑖,𝑡 + 𝑆ℎ𝑜𝑟𝑡𝑎𝑔𝑒𝑡 = 𝐷𝑒𝑚𝑎𝑛𝑑𝑡 ∀𝑡 𝑖=1 Production Feasible: 𝑃𝑟𝑜𝑑𝑖,𝑡 ≤ 𝑃𝑟𝑜𝑑𝑀𝑎𝑥𝑖 ∀𝑖, 𝑡 Expansion Feasible: 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 ≤ 𝐵𝑢𝑖𝑙𝑑𝑀𝑎𝑥𝑖,𝑦 ∀𝑖, 𝑦 Integrality: 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 𝑖𝑛𝑡𝑒𝑔𝑒𝑟 Reliability: 𝐿𝑂𝐿𝑃 𝐵𝑢𝑖𝑙𝑑𝑖,𝑦 ≤ 𝐿𝑂𝐿𝑃𝑇𝑎𝑟𝑔𝑒𝑡 ∀𝑦 This simplified illustration shows the essential elements of the mixed integer programming formulation. Build decisions cover generation, transmission and gas elements, as does supply and demand balance and shortage terms. The entire problem is solved simultaneously, yielding a true co-optimized solution. 64 Integrated Datasets The landscape has changed for planning tools • • • • • • • • • • The US is seeing resource change driven by environmental policy and public policy where many areas of the US have minimal load growth projections. Although many organizations, regulators, ISO’s, federal departments, labs, consultants and others are engaged in a multitude of studies for the future grid designs in America. In the past few years there has been increased recognition that environmental policy and public policy in combination to the vast shale gas developments will lead to increased reliance of the power sector on natural gas generation. Gas Electric coordination has emerged as a complex topic for regulators and the gas and electric sectors to confront along with the electrical system operators with concerns of present and future potential gas constraints that impact electric system operation and reliability. Many studies have been initiated for gas electric coordination in the major interconnects of the US. As well integration of renewables have driven IRP managers and ISO’s to consider sub-hourly ancillary co-optimization analysis in production cost models for major areas of the US. In addition many regulators are interested in co-optimization of generation and transmission expansion to optimize resource change. New strategies of co-optimization of electric and gas infrastructure are becoming of interest as much of the natural gas sector growth may likely be driven by resource change and dependency of electrical sector on pipeline network and gas network operational issue. This is all in the back drop of active demand response, energy efficiency, and renewable portfolio standard adoptions by state governments as well as federal regulator orders such as FERC Order 1000 of considering public policy in transmission planning. Thus the study process and the complexity of issues is driving the demand for integrated datasets and integrated models i.e. to handle all the complexities of planning and operations and electric and gas sector analysis in the short, medium and long term. 66 Integrated Datasets 67