uplift payment

On the Formulation Dependence of Convex Hull Pricing

  • Eugene Litvinov
  • Dane Schiro
  • Feng Zhao
  • Jinye Zhao
  • Tongxin Zheng
    • Categories Applications - OR and Management Sciences Tags , , , ,

    Convex hull pricing provides a potential solution for reducing out-of-market payments in wholesale electricity markets. This paper revisits the theoretical construct of convex hull pricing and explores its important but underappreciated formulation-dependence property. Namely, convex hull prices may change for different formulations of the same unit commitment problem. After a conceptual exposition of the property, … Read more

    A Unified Approach to Solve Convex Hull Pricing and Average Incremental Cost Pricing

  • Yonghong Chen
  • Pete Whitman
  • Richard O'Neill
    • Categories Applications - OR and Management Sciences Tags , , , , ,

    This paper introduces a unified approach to solving convex hull pricing (CHP) and average incremental cost (AIC) pricing problems. By developing a convex hull and convex envelope formulation for individual resources, a CHP model that minimizes uplift can be solved by linear programming (LP) using relaxation of the binary terms of the security constrained unit … Read more