On centralized power pool auction: a novel multipliers stabilization procedure

This paper addresses the Short-Term Hydro-Thermal Coordination (STHTC) problem. It is a large-scale, combinatorial and nonlinear optimization problem. It is usually solved using a Lagrangian Relaxation (LR) approach. LR procedure is based on the solution of the dual problem of the original one. The dual problem variables are the Lagrange multipliers. These multipliers have an economic meaning: electric energy hourly prices. This paper focuses in an efficient solution of the dual problem of the STHTC problem. A novel multiplier stabilization technique, which significantly improves the quality of the solution, is presented. The provided method could be the optimization tool used by the Independent System Operator of a centralized Power Pool. The solution procedure diminishes the conflict of interest in determining energy prices. A realistic large-scale case study illustrates the behavior of the presented approach.