--- title: "Generation expansion planning procedure" subject: "Power Plant Design" chapter: 2 key: "semester_8/power_plant_design:generation-expansion-procedure" source: https://www.bctengineer.com/q/semester_8/power_plant_design/generation-expansion-procedure site: BCT Engineering --- # Generation expansion planning procedure Power Plant Design · Chapter 2: Integrated System Planning in Design Approach - Asked in: 2075 Bhadra, 6 marks; 2073 Magh, 6 marks; 2071 Magh, 6 marks (asked 3 times) - Video: [Generation Planning Part 1](https://www.youtube.com/watch?v=4DSqspq7iYU) — Omkar Buwa - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_8/power_plant_design/generation-expansion-procedure - Whole chapter: https://www.bctengineer.com/md/semester_8/power_plant_design/chapter-2 ## Question Discuss briefly the Generation expansion planning procedure. ## Short answer Generation expansion planning selects the type, size, timing and location of new plants to meet forecast demand at minimum total cost and required reliability. The procedure runs from load forecasting, existing plant data, candidate plants, reliability criteria, and alternative formation through production simulation, present-value economic comparison, and sensitivity analysis to the least-cost plan. ## Answer **Generation expansion planning (GEP)** decides **what type** of generating plants, of **what size**, should be added **when** and **where**, so that the forecast demand is met at minimum total cost (investment + operation) with the required reliability. #### Procedure ```text Load forecast (peak MW, energy GWh) | Existing system data & retirements | Candidate plants (hydro, solar, thermal..) | Reliability criteria (LOLP, reserve) | Generate expansion alternatives | Production costing / simulation | Economic evaluation (PV of cost) | Sensitivity & risk analysis | Least-cost expansion plan ``` 1. **Load forecasting:** Forecast yearly peak demand (MW) and energy (GWh) for 10–25 years, with high, base and low scenarios. 2. **Existing system:** List present plants with capacity, firm energy, availability, operating cost and retirement dates. 3. **Candidate projects:** Identify possible new plants (ROR, storage, pumped storage, solar, thermal, import) with their capital cost, O&M cost, construction time, capacity factor and seasonal output. 4. **Reliability criteria:** Set a target such as Loss of Load Probability (e.g. LOLP ≤ 1 day/year), Loss of Energy Expectation, or a reserve margin (e.g. 15–20%). 5. **Form alternatives:** Build different sequences of plant additions that meet demand year by year. 6. **Production simulation:** For each plan, simulate dispatch (merit order, hydrology, maintenance) to get fuel/operating cost, energy spill and reliability. 7. **Economic comparison:** Find present value of total cost (capital + O&M + fuel + cost of unserved energy) using a discount rate (e.g. 10–12%). Tools: WASP, PLEXOS, dynamic programming. 8. **Sensitivity analysis:** Check the plan for changes in demand growth, fuel price, discount rate, hydrology and delays. 9. **Final plan:** Select the least-cost plan meeting reliability, environmental and policy limits; coordinate it with **transmission expansion planning**; review every 1–2 years. **Example:** NEA's plan balances ROR plants (cheap but low dry-season output) with storage projects like Tanahu to meet the winter evening peak. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. What does generation expansion planning decide? A. Only the tariff of existing plants B. Only daily dispatch of units C. What type, what size, when and where plants are added at least cost with required reliability D. Only the retirement of old plants Answer: C. GEP chooses type, size, timing and location of new plants to meet forecast demand at minimum cost with reliability. (Key point: Purpose of GEP) 2. Which input starts the GEP procedure? A. Load forecast of peak MW and energy GWh B. Sensitivity analysis C. Production costing D. Final plan selection Answer: A. The load forecast sets how much capacity is needed and when, so everything else follows from it. (Key point: First step) 3. Which is an example of a reliability criterion used in GEP? A. Discount rate of 10% B. Capacity factor C. Loss of Load Probability (e.g. 1 day/year) or a reserve margin D. Line cost per km Answer: C. Reliability is set by LOLP, LOLE or a reserve margin such as 15-20%. (Key point: Reliability criteria) 4. How are expansion alternatives compared and then checked? A. By lowest capital cost only, with no further checks B. By present value of total cost, then sensitivity to demand, fuel price, discount rate, hydrology C. By largest installed MW D. By the shortest construction time Answer: B. Alternatives are compared by PV of capital, O&M, fuel and unserved energy cost, then tested for sensitivity to key uncertainties. (Key point: Economic comparison and sensitivity) ## Related in Power Plant Design - [Generation and distribution planning procedure](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Aplanning-generation-distribution) — Power Plant Design, chapter 2 - [Generation expansion planning and load forecasting](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Ageneration-expansion-load-forecast) — Power Plant Design, chapter 2 - [Transmission expansion planning procedure](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Atransmission-expansion-procedure) — Power Plant Design, chapter 2 - [Transmission and distribution planning procedure](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Aplanning-transmission-distribution) — Power Plant Design, chapter 2 - [Transmission expansion planning in deregulated market](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Atransmission-planning-deregulated) — Power Plant Design, chapter 2 - [Power system expansion planning for a utility](https://www.bctengineer.com/question.md?key=semester_8%2Fpower_plant_design%3Aexpansion-planning-national-utility) — Power Plant Design, chapter 2