The reform of electricity market in China has made the market participants more active, which has posed a series of challenges for the power system planning with high penetration of renewable energy. This paper proposed a price-driven bi-level model for transmission expansion planning. At the upper level, the investment cost and operation cost of the transmission system is comprehensively considered. While at the lower level, the market clearing model is established, i.e., energy market and reserve market. The local marginal prices are obtained to guide the expansion planning of the upper level. By integrating the market clearing model of the lower level using Karush-Kuhn-Tucker condition, a mixed-integer nonlinear programming problem is formulated, which is further solved by a Heuristic method. In the case study, a modified Garver-6 bus system is utilized to verify the validity of the proposed method.
Keywords transmission expansion planning, optimization, electricity market, local marginal price