A compensation-based pricing scheme in marketswith non-convexities

A compensation-based pricing scheme is a market clearing mechanism that may be applied when a uniform, linear pricing scheme cannot support equilibrium allocations in the auction markets. We analyze extensions of our previously proposed pricing scheme [14] to include various possible representations of bids that reflect some non-convex costs and constraints. We conclude with a discussion on directions for future research.auction design, electricity market, non-convex bids, minimum profit condition, unit commitment constraints

Profit-based FMS dynamic part type selection over time for mid-term production planning

The dynamic part type selection problem for mid-term scheduling to maximize profit over time in a general flexible manufacturing system is considered. Some mathematical programming models are developed to address this problem and their method of solution is based on a column generation technique. In the solutions to these models, the production plan is represented as a sequence of steady-state, periodical, cyclic schedules. Each cyclic schedule allows a subset of parts of different types to be released periodically in appropriate production ratios. Parts can be ratios and cycles until the production requirements for some part type are types can enter production and new ratios and cycles can easily be found. A two-level procedure is developed. At the upper level, a large-scale linear programming Master Problem is solved, the columns of which are generated by solving a nonlinear, mixed-integer, profit-based that selects part types for simultaneous production over a period. Numerical experiments demostrate that this model is computationally tractable to solve problems of practical size and over several periods of time.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/29721/1/0000055.pd

A new pricing scheme for a multi-period pool-based electricity auction

A new pricing scheme is proposed for determining the social welfare distribution in a centralized pool-based auction in the context of solving the unit commitment problems under competition. A significant contribution of this paper over previous publications on this subject is the inclusion of the price-responsive demand side for the multi-period auctions with dynamic commitment characteristics. The model allows every thermal unit and every consumer to obtain individual maximum profits, and at the same time it gives the market coordinator an adequate tool for solving the ensuing technologically constrained unit commitment problem with fair market clearing. The pricing model is in the form of a mixed linear programming model that minimizes the sum of the compensation costs. The accompanying case study illustrates the approach proposed.OR in energy Electricity market Energy pricing Thermal units Dynamic and integer programming Unit commitment

Restriction techniques for the unit-commitment problem with total procurement costs

Many discrete optimization problems may be solved much easier, if the solution space can be restricted in a convenient way. For a given specific problem, the restriction techniques can be helpful if an available optimization solver, perceived as a black box, is capable of solving quickly only reduced subproblems of a limited size. For the family of hard unit-commitment problems we investigate a hierarchical search algorithm, which is based on decomposition of the problem into two subproblems. The upper-level subproblem is a relatively small decision "kernel" of the problem that can be solved approximately by a search algorithm. We define an appropriate restricted decision space for this subproblem. The lower-level subproblem is an appropriate restriction of the original problem that can be solved efficiently by a dedicated solver. Our approach was analyzed on a set of historical data from the Polish electrical balancing market and the best known solutions were improved by the average of about 2-5%.