A Strengthened Primal-Dual Decomposition Algorithm for Solving Electricity Market Pricing with Revenue-Adequacy and FFR constraints

Goudarzi, H, Hesamzadeh, M R, Bunn, D W and Fotuhi-Firuzabad, M (2024) A Strengthened Primal-Dual Decomposition Algorithm for Solving Electricity Market Pricing with Revenue-Adequacy and FFR constraints. IEEE Transactions on Energy Markets, Policy and Regulation, 2 (3). pp. 379-391. ISSN 2771-9626

Official URL: https://ieeexplore.ieee.org/document/10423810

DOI: https://doi.org/10.1109/tempr.2024.3363371

Abstract

Efficient nodal pricing models and short-term unit commitment planning face continuous needs for improvement as operational requirements evolve. This paper develops a Bilevel Security-Constrained Unit Commitment (BL-SCUC) model to include both revenue-adequacy and Fast Frequency Reserve (FFR) constraints. The upper level of the BL-SCUC model represents the non-convex UC decisions as well as the revenue-adequacy constraints of the market participants (generators, loads, and battery-storage owner). The lower level is a convex economic dispatch model which produces the nodal electricity prices. To solve the proposed BL-SCUC model, it is first reformulated as a single-level Mixed-Integer Linear Program (MILP) using the standard strong-duality approach. The resulting MILP model is hard to solve using standard off-the-shelf solvers such as Cplex, partly because the Big-M parameters’ optimal tuning for linearization in the strong duality method is NP-hard. To solve this, we propose a strengthened Primal-Dual Decomposition (PDD) algorithm, which takes benefit from both Benders-like and Lagrange Dual-like algorithms. The new PDD algorithm eliminates the Big-M parameters without affecting optimal values. Accordingly, the computational burden and optimal solution sensitivity resulting from Big-M parameters are mitigated. Results from the modified IEEE 24-bus system demonstrate the effectiveness of the proposed BL-SCUC model with its PDD algorithm, whilst results from the IEEE 118-bus system show the superiority of the proposed strengthened PDD algorithm over the classic Benders algorithm.

More Details

Item Type:	Article
Subject Areas:	Management Science and Operations
Date Deposited:	16 Feb 2024 11:59
Date of first compliant deposit:	13 Feb 2024
Subjects:	Pricing Electricity supply industry
Last Modified:	13 Nov 2024 12:22
URI:	https://lbsresearch.london.edu/id/eprint/3635