Challenges for market applications in large RTO markets

The pressure on power engineering professionals to generate better solutions for bigger problems in shorter time has driven many important technological advances during the past several years. The era of competitive electricity markets ushered in opportunities for solving many new challenging problems. Key success factors for developing the new generation of solution include: (a) solving the right problem; (b) solving the problem right; and (3) staying within the allocated time. In this paper a few examples based on actual RTO experiences are presented to illustrate some of the more interesting challenges. While security constrained unit commitment (SCUC) is required for RC, the exact formulation of the RC problem in the framework of SCUC requires significant efforts. While linear programming has been the optimization engine for SCED and FTR auction, it is unable to address integer constraint in SCUC. Until recently, most SCUC uses some forms of Lagrangian relaxation (LR) algorithm with various embedded heuristics. Coincidentally, there has been remarkable progress with the mixed integer programming (MIP) method for its growing position in future market optimization applications.