A Comprehensive Framework for Long-Term Resiliency Investment Planning under Extreme Weather Uncertainty for Electric Utilities

TL;DR

This paper introduces a four-part framework for long-term electric utility investment planning under extreme weather uncertainty, combining digital twins, Monte Carlo simulation, and multi-objective optimization.

Contribution

It extends existing capital planning frameworks by integrating extreme weather uncertainty and digital twin technology for more robust investment decisions.

Findings

Model-based optimization methods are computationally complex.

Net present value ranking can outperform complex methods.

Simpler methods may be more effective under certain conditions.

Abstract

Electric utilities must make massive capital investments in the coming years to respond to explosive growth in demand, aging assets and rising threats from extreme weather. Utilities today already have rigorous frameworks for capital planning, and there are opportunities to extend this capability to solve multi-objective optimization problems in the face of uncertainty. This work presents a four-part framework that 1) incorporates extreme weather as a source of uncertainty, 2) leverages a digital twin of the grid, 3) uses Monte Carlo simulation to capture variability and 4) applies a multi-objective optimization method for finding the optimal investment portfolio. We use this framework to investigate whether grid-aware optimization methods outperform model-free approaches. We find that, in fact, given the computational complexity of model-based metaheuristic optimization methods, the simpler net present value ranking method was able to find more optimal portfolios with only limited knowledge of the grid.