Co-Optimized Planning of Local Generation and Distribution Systems Considering Cost, Emissions, and Reliability

Abstract

A robust pathway to achieve net-zero carbon emissions by 2050 requires rapidly electrifying end-use sectors and integrating high shares of renewables, storage, and new energy vectors across power systems. This work introduces a comprehensive generation and distribution expansion planning framework that jointly optimizes local resource portfolios, including renewable and conventional generation, and multi-technology storage, alongside distribution network topology reinforcement. The model employs a unified optimal power flow formulation that minimizes the total net present value of investment, operational, and monetized utilization-weighted failure-risk costs while satisfying long-term carbon emission constraints. As a core contribution, the proposed framework incorporates a planning-oriented failure-risk proxy directly into the optimization process, enabling reliability-related considerations to influence expansion decisions without requiring detailed reliability simulations. In addition, a Global Failure Rate Index is introduced as a post-processing indicator that quantifies system-wide failure-risk exposure based on component failure probabilities and utilization levels. Three Ontario-based case studies (urban, semi-urban, and rural) demonstrate the applicability of the proposed framework. Results show that incorporating the failure-risk proxy can reduce total system costs by up to 7.08% compared with planning approaches that neglect reliability-related risk. Applications include utility planning for net-zero targets and strategic investment in integrated low-carbon power systems.