Stochastic optimization of electric generation and trading-planning in liberalized market

As a result of deregulated markets, the utilities are exposed to different generation planning uncertainties such as energy exchange and gas prises. The generation planning time horizon covers a period of one month to one year. Deterministic techniques are no longer suitable and further more increased the planning risks. To solve this complicated problem the whole system is decomposed into subsystems and the subsystem solutions are coordinated to get the optimal solution of the whole system. This paper proposes a stochastic optimization technique for generation and trading planning to maximize the total utilities income, i.e. the difference between the revenues of energy trades and the costs for generating and purchasing electrical energy considering the different uncertainty sources. Moreover, the risk can be controlled in generation and trading planning using Lagrange-relaxation technique.