Analysis of power systems expansion processes based on System Dynamics - state-of-the-art

The evolution to electricity markets liberalization has supposed a change of paradigm in the scope of decision-making processes inherent to the expansion of power systems. This is mainly due to the participation in these processes of various autonomous agents who does not always act in coordination. In response to this, the use of simulation approaches is useful to analyze the behavior and interaction of market participants. This paper is focused on conducting a state-of-the-art review about the implementation of System Dynamics (SD) approach to replicate the dynamic of long-term infrastructure investments in power systems. Regarding to this, it has been found that SD has been extensively used both to evaluate the expansion of generation capacity and the impact of investments in transmission network required to interconnect different electricity markets. However, it has not been found an application background of SD to assess the dynamic interaction among investments decisions in generation and transmission. In this context, the main contribution of the paper is to propose basic outlines to analyze the interaction of investments undertaken by agents of generation and transmission under a competitive electricity market by focusing on SD. Finally, this model seeks to be a tool to outline policies that encourage coordination and cooperation among autonomous power market agents.