THE NEXT GENERATION OF

ELECTRIC POWER
UNIT COMMITMENT MODELS
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 THE NEXT GENERATION OF
ELECTRIC POWER
UNIT COMMITMENT MODELS

Editors

Benjamin F. Hobbs
The Johns Hopkins University

Michael H. Rothkopf
Rutgers University

Richard P. O’Neill
Federal Energy Regulatory Commission

Hung-po Chao
Electric Power Research Institute

KLUWER ACADEMIC PUBLISHERS

NEW YORK, BOSTON, DORDRECHT, LONDON, MOSCOW
eBook ISBN: 0-306-47663-0
Print ISBN: 0-7923-7334-0

©2002 Kluwer Academic Publishers

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Print ©2001 Kluwer Academic Publishers

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CONTENTS
Acknowledgments vii

I. The Evolving Context for Unit Commitment Decisions

1. Why This Book?: New Capabilities and New Needs for Unit
Commitment Modeling
B. F. Hobbs, W. R. Stewart Jr., R. E. Bixby, M. H. Rothkopf, R. P.
O'Neill, H.-p. Chao 1

2. Regulatory Evolution, Market Design and Unit Commitment

R. P. O'Neill, U. Helman, P. M. Sotkiewicz, M. H. Rothkopf, W. R.
Stewart Jr. 15

3. Development of an Electric Energy Market Simulator

A. Debs, C. Hansen, Y.-C. Wu 39

II. New Features in Unit Commitment Models

4. Auctions with Explicit Demand-Side Bidding in Competitive

Electricity Markets
A. Borghetti, G. Gross, C. A. Nucci 53

5. Thermal Unit Commitment with a Nonlinear AC Power Flow

Network Model
C. E. Murillo-Sánchez, R. J. Thomas 75

6. Optimal Self-Commitment under Uncertain Energy and Reserve

Prices
R. Rajaraman, L. Kirsch, F. L. Alvarado, C. Clark 93

7. A Stochastic Model for a Price-Based Unit Commitment Problem

and Its Application to Short-Term Generation Asset Valuation
C.-L. Tseng 117

8. Probabilistic Unit Commitment under a Deregulated Market

J. Valenzuela, M. Mazumdar 139

III. Algorithmic Advances

9. Solving Hard Mixed-Integer Programs for Electricity Generation

S. Ceria 153
vi The Next Generation of Unit Commitment Models

10. An Interior-Point/Cutting-Plane Algorithm to Solve the Dual Unit

Commitment Problem -- On Dual Variables, Duality Gap, and
Cost Recovery
M. Madrigal, V. H. Quintana 167

11. Building and Evaluating Genco Bidding Strategies and Unit

Commitment Schedules with Genetic Algorithms
C. W. Richter, Jr., G. B. Sheblé 185

12. An Equivalencing Technique for Solving the Large-Scale Ther-

mal Unit Commitment Problem
S. Sen, D.P. Kothari 211

IV. Decentralized Decision Making

13. Strategic Unit Commitment for Generation in Deregulated Elec-

tricity Markets
A. Baíllo, M. Ventosa, A. Ramos, M. Rivier, A. Canseco 227

14. Optimization-Based Bidding Strategies for Deregulated Electric

Power Markets
X. Guan, E. Ni, P. B. Luh, Y.-C. Ho 249

15. Decentralized Nodal-Price Self-Dispatch and Unit Commitment

F. D. Galiana. A. L. Motto, A. J. Conejo, M. Huneault 271

16. Decentralized Unit Commitment in Competitive Energy Markets

J. Xu, R. D. Christie 293

Index 317
ACKNOWLEDGMENTS
This volume contains papers that were presented at a workshop entitled
"The Next Generation of Unit Commitment Models", held September 27-
28, 1999 at the Center for Discrete Mathematics and Theoretical Computer
Science (DIMACS), Rutgers University, Piscataway, NJ. The editors grate-
fully acknowledge the financial support of the co-sponsors of the workshop:
DIMACS (funded by the National Science Foundation under grant NSF
STC 91-19999); and the Electric Power Research Institute (EPRI), which
supported the publication and distribution of this book. The editors also
thank Sarah Donnelly of DIMACS for her organizational support of the
workshop and the subsequent book.
The editors would also like the many speakers and other participants of
the workshop for their ideas and hard work. All the papers were subjected
to anonymous peer review by at least two referees and two editors. The
referees included authors of other papers in this volume, along with Paul
Sotkiewicz and Judith Cardell of the Office of Economic Policy of the Fed-
eral Energy Regulatory Commission.
Technical editing for the volume was ably provided by Debi Rager of
The White Cottage Company. Liz Austin of Johns Hopkins Unviersity
compiled the index. Funding for B. Hobbs' involvement in the workshop
and book came from NSF Grants ECS 96-96014 and 00-80577. Partial
support for M. Rothkopf was provided by NSF grant SBR 97-09861.