Fully distributed convex hull pricing based on alternating direction method of multipliers

Abstract

In certain power markets, due to the non-convex operation characteristics, generators adhering to the decisions of Independent System Operators (ISO) may struggle to recover costs through local marginal energy sales. ISOs impose discriminatory additional payments as incentives for generator compliance. Convex hull pricing is a unified scheme that significantly reduces these supplementary payments. The Lagrangian dual problem of the Unit Commitment (UC) problem is solved within the dual space to determine convex hull prices. To navigate the computational challenges posed by the real large-scale power systems, we propose a methodology for a global convergence distributed solution, which addresses the Lagrangian dual problem. This methodology is based on the Alternating Direction Method of Multipliers (ADMM) algorithm and incorporates convex hull cut planes to enhance computational efficiency. Moreover, a tight and compact UC model is employed to reduce the number of iterations. Numerical results indicate that if the convex hull descriptions of units can be obtained, our algorithm is capable of providing precise convex hull prices and high-quality solutions within a feasible timeframe, while also maintaining the confidentiality of individual subset unit information.