Discrete optimization via simulation to determine reliable network investments

Solving optimization problems in power systems planning often imposes a compromise between the accurate representation of the power system operation and the simplifications made in the mathematical methodologies used to find the optimal solution. Hence, classic heuristic algorithms go deep modelling operational details without having a clear message about the quality of the solution, whereas mathematical programming approaches find the optimal solution by (significantly) simplifying system operation. In this vein, this article proposes the utilization of Discrete Optimization via Simulation algorithms to solve optimization problems when a detailed representation of the system and information about the quality of the solution are required. In particular, the Industrial Strength COMPASS algorithm is applied to find the optimal set of new transmission lines that maximizes power system reliability given a certain budget and considering a detailed power system model, where a full unit commitment with network constraints and an hourly sequential Monte Carlo are implemented.