  In this paper, the differences between an integrated and hierarchical
generation and transmission expansion planning approaches are first described.
Then, the hierarchical approach is described in detail. In general terms, in
this scheme the investment decisions are made in steps, instead of an overall
optimization scheme. This paper proposes a stochastic hierarchical
generation-transmission expansion planning methodology based on a three-step
procedure, as follows:
  1. In this step, an integrated expansion planning problem of generation and
interregional interconnections is solved; 2. Taking the optimal expansion plan
of (generation and interconnections) into account, a production costing
simulation with the detailed network representation is performed without
monitoring circuit flow limits (except the ones in the interconnections, which
are monitored); this simulation produces a set of optimal dispatch scenarios
(vectors of bus loads and generation); 3. A Transmission Expansion Planning
(TEP) model is then applied to determine the least-cost transmission expansion
plan that is robust with respect to all operation scenarios of step 2, using an
enhanced Benders decomposition scheme that: (a) incorporates a subset of the
operation scenarios in the investment module; and (b) presents a "warm-up" step
with a "greedy" algorithm that produces a (good) feasible solution and an
initial set of feasibility cuts.
  The application of the hierarchical planning scheme is illustrated with a
realistic multi-country generation and transmission planning case study of the
Central America's electricity market.
