A Decision Analysis Approach to Energy System Expansion Planning

Capacity expansion decisions are critically important to both public and private-sector energy suppliers as well as regional and national energy planning agencies. Simplistically stated, planning for the expansion of an energy supply system involves determining when and where new energy production facilities of various types and sizes should be deployed to meet projected demands. As with most energy-related decision problems, several factors complicate capacity expansion planning. These factors include the involvement of multiple decisionmakers and interest groups, uncertainties about technology costs and demand projections, varying degrees of risk associated with alternative energy technologies, the need to consider costs and effects over long time horizons, and the difficulty of quantifying key impacts and concerns.