A mew model for the optimization of the power system at Imatran Voima

In this paper, the authors present a new generation scheduling model for the Imatran Voima power system. The model considers a two-area hydrothermal power system. In addition to hydro and thermal production, the model is capable of considering various kinds of power contracts. The large-scale optimization problem is solved by the augmented Lagrangian relaxation approach. After the demand and reserve requirements of the two areas are relaxed, the optimization problem is decomposed into thermal, hydro and contract subproblems and the optimization of power transmission between two interconnected areas. Each subproblem is solved by an appropriate optimization method. The high-level problem is to choose optimal Lagrange multipliers. This produces different marginal cost patterns for the two areas.