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In competitive electric energy markets, the power generation dispatch optimization is one of the most important missions among generation companies-how to respond to the markets, dispatch their units, and maximize profits. This paper proposes an approach to incorporate power contracts, which include call and put options, forward contracts, and reliability must-run contracts, into multi-area unit commitment and economic dispatch solutions. The proposed solution algorithm is based on adaptive Lagrangian relaxation, unit decommitment, and lambda-iteration methods. The problem formulation consists of three stages: 1) the incorporation of the power contracts, 2) the multi-area unit commitment, and 3) the multi-area economic dispatch. The proposed algorithm has been successfully implemented, and its testing results on modified IEEE test cases are promising.