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Mathematical Problems in Engineering
Volume 2015 (2015), Article ID 236958, 17 pages
http://dx.doi.org/10.1155/2015/236958
Research Article

Environmental and Economic Optimization Model for Electric System Planning in Ningxia, China: Inexact Stochastic Risk-Aversion Programming Approach

1Research Institute of Technology Economics Forecasting and Assessment, School of Economics and Management, North China Electric Power University, Beijing 102206, China
2Environmental Systems Engineering Program, Faculty of Engineering, University of Regina, Regina, SK, Canada S4S 0A2
3MOE Key Laboratory of Regional Energy Systems Optimization, S&C Resources and Environmental Research Academy, North China Electric Power University, Beijing 102206, China

Received 10 June 2014; Accepted 23 August 2014

Academic Editor: Carsten Proppe

Copyright © 2015 L. Ji et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The main goal of this paper is to provide a novel risk aversion model for long-term electric power system planning from the manager’s perspective with the consideration of various uncertainties. In the proposed method, interval parameter programming and two-stage stochastic programming are integrated to deal with the technical, economics, and policy uncertainties. Moreover, downside risk theory is introduced to balance the trade-off between the profit and risk according to the decision-maker’s risk aversion attitude. To verify the effectiveness and practical application of this approach, an inexact stochastic risk aversion model is developed for regional electric system planning and management in Ningxia Hui Autonomous Region, China. The series of solutions provide the decision-maker with the optimal investment strategy and operation management under different future emission reduction scenarios and risk-aversion levels. The results indicated that pollution control devices are still the main measures to achieve the current mitigation goal and the adjustment of generation structure would play an important role in the future cleaner electricity system with the stricter environmental policy. In addition, the model can be used for generating decision alternatives and helping decision-makers identify desired energy structure adjustment and pollutants/carbon mitigation abatement policies under various economic and system-reliability constraints.