Price-based unit commitment problem

Abstract The unit commitment problem is determining the schedules for power generating units and the generating level of each unit. The decisions concern which units to commit during each time period and at what level to generate power to meet the electricity demand. The problem is atypical scheduling problem in an electric power system. The electric power industry is undergoing restructuring and deregulation. In this paper we develop a stochastic programming model which incorporates power trading. We need to incorporate the uncertainties of electric power demand or electricity price into the unit commitment problem. It is assumed that demand and price uncertainty can be represented by ascenario tree. We propose a stochastic integer programming model in which the objective is to maximize expected profits. In this model, $\mathrm{o}\mathrm{n}/\mathrm{o}\mathrm{f}\mathrm{f} $ decisions for each generator are made at the first stage. The approach to solving the problem is based on Lagrangian relaxation and dynamic programming