Title:Novel Quality Measure and Efficient Resolution of Convex Hull Pricing for Unit Commitment

Abstract:Electricity prices determined by economic dispatch that do not consider fixed costs may lead to significant uplift payments. However, when fixed costs are included, prices become non-monotonic with respect to demand, which can adversely impact market transparency. To overcome this issue, convex hull (CH) pricing has been introduced for unit commitment with fixed costs. Several CH pricing methods have been presented, and a feasible cost has been used as a quality measure for the CH price. However, obtaining a feasible cost requires a computationally intensive optimization procedure, and the associated duality gap may not provide an accurate quality measure. This paper presents a new approach for quantifying the quality of the CH price by establishing an upper bound on the optimal dual value. The proposed approach uses Surrogate Lagrangian Relaxation (SLR) to efficiently obtain near-optimal CH prices, while the upper bound decreases rapidly due to the convergence of SLR. Testing results on the IEEE 118-bus system demonstrate that the novel quality measure is more accurate than the measure provided by a feasible cost, indicating the high quality of the upper bound and the efficiency of SLR.