Capacity Expansion Model
A capacity expansion model is a planning tool that determines the optimal mix of future generation, storage, and transmission assets needed to meet demand at least cost while satisfying policy, reliability, and emissions constraints. The models simulate investment and dispatch decisions over multi-decade horizons, capturing technology learning, retirements, and fuel price scenarios.
Planners use linear programming, mixed-integer programming, or heuristic methods to evaluate thousands of candidate buildouts under different load forecasts, renewable targets, and policy pathways. The outputs include capacity additions by technology, transmission upgrades, system costs, and emissions trajectories.
Capacity expansion models inform integrated resource plans, policy roadmaps, and investor diligence by quantifying how reserve margins, renewable mandates, and fuel prices interact. Their accuracy depends on granular data for existing assets, queue projects, and technology cost curves.
Model transparency and open-source tooling allow stakeholders to scrutinize assumptions and rerun scenarios with their own cost or policy inputs, which improves trust in resulting infrastructure roadmaps.
Technical Details
- •Optimizes investment and dispatch decisions across multi-year planning horizons
- •Incorporates constraints such as reserve margins, emissions caps, and transmission limits
- •Uses technology learning curves and retirement schedules to forecast future fleets
- •Can operate at zonal, nodal, or national spatial resolution
- •Requires extensive datasets on capital costs, fuel prices, and policy targets
Why It Matters
Investors and policymakers rely on capacity expansion studies to prioritize transmission upgrades and generation investments. Tera supplies the asset inventories, cost benchmarks, and policy scenarios these models require, enabling clients to test how different development strategies perform across markets before committing capital.
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