Abstract

Cooperative Game Theory has recently attracted attention in power systems research as a tool for expansion planning analysis. However, this analysis is usually performed in an ex-post manner, i.e., planning and operation decisions are separated from the allocation mechanisms themselves. The existing paradigm implies selecting an allocation rule (say, the Shapley value) to share the value of cooperation and verifying its rationality (e.g., by checking the Core of the cooperative game). Additional metrics of coalitional stability are omitted. Such an ex-post approach could lead to coalitional stability issues, which may hamper the establishment of cooperation. For example, there could be a severe imbalance in players' positions, and the contribution of some players could be underestimated in the grand coalition. This paper proposes a bilevel optimization framework for explicitly incorporating Cooperative Game Theory principles into transmission expansion planning problems. Using a simple 4-system case study and a real-world case of cross-border power interconnections in Northeast Asia, we demonstrate that it is possible to make planning decisions in an anticipatory manner subject to the stability of coalitions. The identified expansion plans with enhanced coalitional stability indicate the ways of making parties more equally involved in electricity trading. Finally, we discuss the applicability of the bilevel TEP model, the properties of resulting cooperative games, and the compromise between coalitional stability and economic efficiency in transmission expansion planning.