Classical and Recent Aspects of Power System Optimization

By Ahmed F. Zobaa and Shady Abdel Aleem

Classical and Recent Aspects of Power System Optimization presents conventional and meta-heuristic optimization methods and algorithms for power system studies. The classic aspects of optimization in power systems, such as optimal power flow, economic dispatch, unit commitment and power quality optimization are covered, as are issues relating to distributed generation sizing, allocation problems, scheduling of renewable resources, energy storage, power reserve based problems, efficient use of smart grid capabilities, and protection studies in modern power systems. The book brings together innovative research outcomes, programs, algorithms and approaches that consolidate the present state and future challenges for power.

• Analyzes and compares several aspects of optimization for power systems which has never been addressed in one reference
• Details real-life industry application examples for each chapter (e.g. energy storage and power reserve problems)
• Provides practical training on theoretical developments and application of advanced methods for optimum electrical energy for realistic engineering problems

• Language: English
• Publisher: Academic Press
• Release date: Jun 29, 2018
• ISBN: 9780128124420

Book preview

Kingdom

Preface

In 1855, after the first industrial revolution, the word optimization, or making the best of anything, was originated. In mathematics, the best solution is the maximum or minimum of certain variables subject to a set of constraints. In life, we strive for the best in all things, and we always think about how we can get better results with less effort and less cost in the least time. In power systems, optimization is the art of solving problems and deciding the best alternative following a set of criteria in less time, with less human and material costs.

In the past, mathematically based optimization methods were the primary tools in the formulation and solving of numerical problems. Currently, with the accelerated evolution of computer-based technologies and availability of user-friendly software capable of performing complex tasks with a large number of decision variables and high computational speeds, meta-heuristic algorithms are widely employed for global optimization problems.

Planning, development, management, and operation of modern power systems can be rationally considered to be long-term or short-term optimization problems. In this book, conventional and recent meta-heuristic optimization methods and algorithms being used for power system studies are presented and discussed. On one hand, the classic aspects of optimization in power systems studies (such as optimal power flow, economic dispatch, and unit commitment optimization problems) are introduced and discussed, taking into consideration the recent developments in power systems that have led to new challenges in these areas. On the other hand, hot-topic optimization problems for modern power systems and smart grids are demonstrated and discussed.

This book aims to bring together several aspects of optimization for power systems which, up to now, have been scattered in different articles and books. It also introduces innovative research outcomes, programs, algorithms, and approaches that consolidate the present and future, and opportunities and challenges of the power systems from techno-economic engineering perspectives to improve readiness for the challenges of modern and future power systems.

The book focuses on classical and recent aspects of power system optimization. It is organized into eighteen chapters, each of which begins with the fundamental structure of the problem required for a fundamental understanding of the methods introduced.

Chapter 1: This chapter summarizes the state-of-the-art of the application of optimization methods and tools in the planning and operation of power systems to aid in their efficiency. The chapter describes numerous algorithms used in these optimization methods for solving different power system problems. Several areas that deserve attention and require the utilization of new optimization methods are also mentioned. A significant challenge associated with gradually increasing system sizes tests the limits of the existing algorithms, particularly in real-time applications. Furthermore, the growing penetration of renewable energy resources in the system brings uncertainties to the current problem formulations. The use of new technologies in dealing with those issues has also been highlighted in the chapter.

Chapter 2: This chapter provides an overview of uncertainty modeling methods in power system problems with a focus on the robust optimization (RO) method. The RO method is a practical way to handle the uncertainties associated with a variety of power system parameters, including electricity price, power generation of renewable energy sources, and load demands. The power system problems studied through application of the RO method are classified, and a review is prepared for researchers in this area. Finally, the RO method is applied to a case study to familiarize the reader with RO implementation on power system problems. The simulation results are reported, and the obtained solution is analyzed to ensure the performance of the RO method in modeling the uncertainty parameters.

Chapter 3: There are many optimization problems in the world, and researchers are constantly working to develop efficient algorithms for solving them. One popular approach for solving these problems is the particle swarm optimization (PSO) algorithm. This chapter presents some efficient self-sealing/self-adjusting, adaptive, error-driven PSO algorithms. The proposed algorithms are based on the modification of inertia factor in the speed and position equations at each iteration of the PSO algorithm. The error-per-iteration rate is used to modify the inertia factor to improve convergence speed and efficiency. These methods are implemented in several test cases, and the results are presented for each method. The obtained results are compared to a conventional PSO algorithm to show the efficiency of the proposed methods. Following validation, the best algorithm is selected and utilized to solve a reactive market clearing problem.

Chapter 4: The application of the radial movement optimization (RMO) to different types of nonconvex economic dispatch (ED) problems and fixed-head hydrothermal unit problems are introduced in this chapter. Four sample test systems are considered. For all the types of ED problems, RMO provides better simulation results compared to other algorithms in terms of high-quality solution and stable convergence.

Chapter 5: This chapter presents a study of the application of the metaheuristic-based GA approach to solve power system generator maintenance scheduling (GMS) problems, taking cost criterion as its objective and reliability criterion as the constraint. The application of this GA approach has been demonstrated to solve the GMS problem for small, 3-unit, medium 5-unit, and a large 21-unit test systems using an integer-based GA algorithm. The appropriate crossover and mutation probabilities of a GA approach are determined after a number of trials for each of the test systems. The test results of GA are compared with other mathematically based approaches such as decomposition approach and dynamic programming and with that of stochastic technique MDPSO. The optimal results obtained in this chapter show that the GA approach is more robust and suitable than mathematical programming techniques, irrespective of the size of the generator maintenance scheduling problems under consideration. Furthermore, upon statistical analysis, GA is found to have a faster convergence for the complex GMS problem.

Chapter 6: In this chapter, distributed/decentralized approaches to solve the optimal power flow (OPF) problem in a power system are reviewed, with a focus on the widely used DC power flow formulation, which is a simplified power flow model with an acceptable approximation for transmission networks. The main advantage of using the DCOPF formulation is to obtain a linearized model of the power system. State-of-the-art decomposition techniques to address the scalability of the OPF analysis are reviewed. Then, application of the Lagrangian Relaxation (LR) decomposition and augmented LR in designing decentralized DCOPF algorithms are discussed. The chapter also provides an overview of consensus-based distributed optimization method to deal with the DCOPF problem in a microgrid.

Chapter 7: This chapter presents a survey related to the optimal power flow (OPF) problem. The chapter describes the OPF problem formulation, including the common objective functions of power system, control variables, and operating constraints, the conventional methods that have been employed to solve the OPF problem (including the pros and cons of these methods), and the recent optimization techniques that have been applied for OPF. In addition, the recent optimization algorithms have been categorized based on inspiration methods such as evolutionary, human, nature, bio-inspired, and physics-inspired techniques.

Chapter 8: Optimal distribution system planning and proper selection of conductors can reduce electrical power losses while complying with the technical operational limits and economic aspects. In this chapter, a comprehensive overview of the problem of optimal conductor selection is presented. Further, the grasshopper optimization (GO) algorithm is proposed to solve the problem of optimal conductor selection in radial distribution networks. The proposed algorithm is applied to two test systems. The results achieved are compared with other methods available in the literature. The comparative analysis shows the effectiveness of the proposed algorithm.

Chapter 9: This chapter presents the classical and recent aspects of active power filters for power quality improvement. Types of active power filters, power circuits for realization of active power filters, and their control systems are presented and discussed in detail.

Chapter 10: This chapter presents the formulation of the capacitor model parameterization problem when the voltage across the capacitors’ terminals has harmonic distortions. The optimization-based parameterization methodology determines the parameters of an electrical model by minimizing the difference between the reference current acquired in laboratory tests and the calculated current flowing through the terminals of the parameterized power capacitor model., A methodology for acquiring the necessary reference currents in laboratory tests to realize the actual parameterization is also presented. Different cases are considered to show the effectiveness of optimization-based parameterization methodology. Such an optimization-based methodology is applicable as a prior tool to support capacitor allocation studies in power distribution systems.

Chapter 11: In this chapter, the authors present the 2D-cdEMSA, a two-level computational, multidimensional, continuous/discrete, enhanced melody search algorithm designed to improve performance of the music-inspired optimization algorithms in dealing with complex, nonconvex, large-scale, nonlinear mixed-integer optimization problems. The newly proposed 2D-cdEMSA is organized by multiple music players with a two-level improvisation. Both single and group improvisation levels are used to improvise new melodies. Using multiple musicians with different tastes, ideas, and experiences in the context of the interactive relationships among musicians can cause the musicians to choose better pitches. In addition, a midterm dynamic planning problem of the medium voltage (MV), open-loop distribution networks (DyMODN) in the presence of distributed generation resources has been employed to evaluate the performance of the 2D-cdEMSA, compared with other existing optimization algorithms. The proposed DyMODN problem, with a new point of view, modeled and scrutinized the probabilistic characteristics of the power demand needed to provide a well-designed framework of distribution network expansion planning. Investment costs—operational cost along with maintenance cost—and costumer outage costs were considered in the optimization problem as three objective functions. The DyMODN problem takes into account Kirchhoff’s current and voltage rules, operational constraints on the capacities of the distribution network equipment, constraints related to the financial resources, and the logical constraints. In this chapter, the DyMODN satisfied the challenges of distribution network expansion planning, and accurately modeled the probabilistic characteristics of the power demand. In addition, the authors performed a thorough analysis in which the 2D-cdEMSA was compared with state-of-the-art optimization algorithms. Additionally, the performance of the optimization algorithms, especially the 2D-cdEMSA, was thoroughly assessed through an index of cost saving. The simulation results show that the newly proposed 2D-cdEMSA outperformed the other optimization algorithms in all indices of the DyMODN problem. Hence, the 2D-cdEMSA seems to surface as an effective optimization algorithm for future large-scale engineering optimization problems with big data.

Chapter 12: This chapter provides an overview of recent challenges and applications in demand-side management for city districts. Relevant requirements for the efficient deployment of flexibility are discussed and lead to the application of a state-of-the-art architecture and distributed optimization techniques. The work links the relevant flexibility user, such as the balance responsible party or distribution system operator, to the flexibility provider in an architecture recommended by the Smart Grids Task Force of the European Commission. As major demand-side flexibility use case within demand response, the standard portfolio coordination optimization problem on the district level is introduced and discussed. Although multiple flexibility sources are introduced, the application focuses on flexibility from electrothermal heating systems equipped with thermal storage due to their growing value in residential sectors. The first design choice from the standpoint of hierarchical architecture and other requirements is distributed optimization. Therefore, an example application of the alternating direction method of multipliers proves how an aggregation service provider can successfully balance demand and supply across temporal scales. Furthermore, derived from the requirements, uncertainty must be considered within demand response applications. In this work, model predictive control and robust optimization yield a reduction in energy deviations from the offline (day-ahead) and beforehand-scheduled planning of flexible devices compared to the uncertainty affected by intraday operation. However, the application also shows that consideration of uncertainty always comes with a certain cost, such as computational intensive calculations and increasing energy costs. The latter, though, depends on the value of charged imbalance/adjustment cost. The additional adjustment costs could overwhelm the total energy costs of robust optimization and make the robust optimization with model predictive control an appealing strategy to reduce the total energy costs, including adjustments.

Chapter 13: In this chapter, two demand-side managements (DSMs) are studied. One is for microgrids, and treats all loads and generations under the same bus using lumped models, while the other is for distribution systems and considers the power flow between different buses using the networked model. In both models, to account for the stochastic nature of DERs, a SAA-based stochastic optimization framework is proposed. For the distribution grids case, a decentralized framework is studied to alleviate the centralized computational burden. Numerical results show that on one hand, decentralized framework and SAA-based stochastic optimization are complementary. The decentralized method makes the computational demanding numerical approximation much more scalable. On the other hand, the networked model does show some benefits over the lumped model in terms of better managing the network voltage and economic operations, but at the cost of more computational complexity. For DSM designers, there is no simple answer in which DSM outperforms the other; selection is highly dependent on the application scenario. For future researchers, asynchronous decentralized methods will be studied to account for communication delay between different nodes.

Chapter 14: The increasing number of gas-fired power plants in the electrical network and the augmentation of their share in the energy provision pattern have coupled two widespread energy systems, electricity and natural gas, to each other. Furthermore, the entrance of the new technologies such as power to gas units or microturbines among the energy hubs concept has reinforced the stated linkage. This coupling brings a valuable optimization potential despite increasing complexity. In addition, considering the natural gas constraints gives us a comprehensive and realistic view of the power system optimization problems. This chapter presents an explanation about multicarrier energy systems in addition to their formulations and simulations. The topic of multicarrier energy system is introduced. The basics of integrated energy systems formation are discussed with explanations about fundamentals of an energy hub and review of some literature in this regard. Further, the different sizes of multicarrier energy systems problems are explored. Diverse scales of these problems from a mono-energy hub optimization to widespread integrated systems investigation have been mentioned. More detailed discussion about the simultaneous optimization of electrical and natural gas networks considering their technical constraints has been further provided. In addition, a comprehensive mathematical formulation of optimal energy flow of multicarrier energy systems (electricity-gas) is presented. The simulation of proposed formulation has been introduced, and its results have been demonstrated.

Chapter 15: This chapter studied the optimal robust scheduling of MGs in the day-ahead market, where the studied MG contains hydrothermal systems, wind farms, and a pump storage unit. In addition, the studied MG is interconnected with the main grid, which makes it capable of buying power during the scheduling time horizon. The uncertainty associated with power market price has been considered and studied using robust optimization method. An effective and strong optimization technique is employed for providing the minimum operating cost of the studied MG. The obtained solutions prove the practicality and high performance of the proposed model for obtaining optimal robust scheduling of hydrothermal system, WT, and pumped storage unit.

Chapter 16: The motivation for including a chapter on geomagnetically induced currents (GIC) in the context of power system optimization is to familiarize the reader with a potential threat to power system stability and availability, which requires the inclusion of particular elements in the system to optimize the resilience of the system to this threat. The flow of GIC through transmission lines and transformers across a power network could have negative consequences. These include an increase in the reactive power demanded by GIC-laden transformers, transformers operating within the region of nonlinearity due to half-wave saturation, excessive heating in transformers leading to thermal damage, malfunction of transmission line protection schemes, and voltage problems in affected sections of the network. The first part of the chapter focuses on the origins and propagation of space weather events from the sun to the Earth and provides an overview of the indices that are used to characterize the intensity of GMDs. Some models are presented which are used for prediction of the arrival time and intensity of GMDs from solar wind parameters. The first part concludes with the means available to power system operators to be notified about space weather events that may lead to GMDs. It gives an overview of the coupling between space weather and the electrical power system. Once the coupling has been established, the resulting effect of the flow on GIC in the power system can be discussed. The second part of the chapter provides a methodology for calculating GICs in electrical power systems, and discusses aspects of modeling, measurement, and mitigation of GICs in power systems.

Chapter 17: The multi-objective problem formulation is a prevailing tool in decision making, as it analyzes all the trade-offs among the conflicting criteria. Multi-objective formulation for transformer design optimization (TDO) problem presented in this chapter aims to improve reliability, design, and efficiency of the transformer and, in turn, its life expectancy. To satisfy all the needs of various types of customers, manufacturers, utilities, etc., minimization of competing objectives, purchases cost, and total life time cost is necessary. Thermal and practical manufacturing constraints have been considered.

Chapter 18: This chapter proposed a decomposition-based multi-objective teaching learning algorithm (MOTLA/D) for solving a reactive power system problem. The effectiveness and performance of MOTLA/D were compared with respect to those of MOEA/D, which represents a state-of-the-art algorithm in three cases of study. The results indicate that the proposed algorithm was able to obtain better solutions than MOEA/D in all the analyzed cases. In this chapter, an improvement of both reactive losses and voltage stability were attained.

Finally, this book aims to introduce good practice with new research outcomes, programs, and ideas that join several aspects of optimization in power systems from different perspectives. It is a tool for the planners, designers, operators, and practicing engineers of electrical power systems who are concerned with optimization problems in power systems. Likewise, it is a key resource for advanced students, postgraduates, academics, and researchers who have some background in electrical power systems to use this material to bring themselves up to date with recent research in the field.

The Editors

Ahmed Zobaa

Shady Abdel Aleem

Almoataz Abdelaziz

Chapter 1

Optimization Methods Applied to Power Systems: Current Practices and Challenges

Jeremy Lin⁎; Fernando Magnago†; Juan Manuel Alemany†    ⁎ DNV-GL Energy Advisory Group, Dallas, TX, United States

† National University of Rio Cuarto, Rio Cuarto, Argentina

Abstract

Optimization tools applied in power system areas are becoming increasingly essential to support the complex task of efficiently providing electricity to the grid. The power system areas where these optimization tools are needed include power system operation, analysis, scheduling, and energy management. The problems in these areas require the study of the objective function and constraints in different ways. This chapter is primarily focused on the review of the various optimization methods and their applications to these types of problems. Furthermore, the most pressing challenges emerging in this area are also discussed.

This chapter is intended for both first-year graduate students and senior-year undergraduate students who would like to improve their knowledge of power system optimization and who would like to study the fundamental and advanced topics related to power system optimization tools.

A good understanding of these fundamental concepts and the emerging challenges in this area is necessary to further enhance the knowledge of the complex operation of power systems and electricity markets.

Keywords

Unit commitment; Economic dispatch; Optimal power flow; Fuel scheduling; Deterministic methods; Decomposition methods; Stochastic programming

1 Introduction

Planning and decision-making in energy, in general, involve the allocation of a large amount of resources which significantly impacts all the actors in an economy. The main objective of planning in power systems is to define an appropriate strategy with regards to generation and transmission to efficiently utilize the system. In a general framework for energy efficiency, optimization applied to the efficient use of electric resources is essential. In the case of power systems, applied optimization is related to the planning and scheduling of the resources to aid in the system operation [1].

In this chapter, we will begin by outlining the key problems in power systems that are naturally suitable for applications of classical optimization methods to solve these problems. For example, unit commitment (UC), economic dispatch (ED), and optimal power flow (OPF) are three key problems which are critical to the economically efficient operation of the power system.

UC is a large-scale, nonconvex, mixed-integer programming problem which requires effective and efficient numerical methods to obtain its solution. ED is a step that needs to be done after completing the UC process, while the OPF solves the ED by adding additional constraints to the optimization problem [2].

In all these activities, the optimization methods emanating from the operations research field play a significant role in the decision-making process associated with UC, ED, and OPF. After outlining these problems, the optimization methods that are currently employed in solving these problems are presented. Mathematically, the optimization methods employed in these formulations are linear programming, mixed-integer programming, decomposition methods and stochastic approaches. These methods constitute a core set of optimization methods that are currently applied [3].

After presenting these optimization problems and solution methods, we will attempt to present some of the emerging challenges we face in current and future power systems. It is believed that the future grid will face some challenging developments such as the smart grid, microgrid, distributed energy resources (DER), and massive amounts of renewable energy sources (RES), to name just a few. These new developments will pose very different kinds of problems to the existing power systems.

In the final section of the chapter, we will present some of these challenges in detail and discuss the optimization methods currently being used to solve these problems. The problems described will be focused on practical applications to the real large-scale systems, including time-coupling constraints, network constraints, size and variation of the control variables, or stochastic nature of renewable resources. Because these are the frontier areas of research with uncertain results, we will also provide some speculations in terms of applications of potential optimization methods. Some innovations that incorporate energy efficiency in to the planning and operation of power systems with high renewables penetration will also be described. New concepts and techniques necessary to manage uncertainty in the models and algorithms that are commonly developed for deterministic conditions will be included as well.

2 Key Scheduling Problems in Power System Operation

From a general perspective, the power system economic operation involves the operation of generation, transmission, and distribution subsystems with the objective of operating these subsystems efficiently and fulfilling the requirement of maintaining the balance between generation and load at all times. Moreover, the voltage at each system node and the system frequency must remain within prespecified limits. This combination of economic and technical requirements for system operation is the most important task for the system operators. The system operator needs to execute three essential calculations: the UC, the ED, and the OPF. These major decision-making problems are described in Fig. 1 from a temporal perspective.

Fig. 1 Temporal perspective—major decision-making problems.

The next sections will cover these three problems.

2.1 Unit Commitment

The UC problem can be defined as the process of predispatching generation units over a time horizon to satisfy the electricity demand and operational constraints. Typically, a solution to the UC problem is achieved by formulating and solving a specific objective such as production cost minimization [4].

Security-constrained unit Commitment (SCUC) is an extension of the generic UC in which the network constraints are included in the UC problem to ensure that the system is secure after completing this important step. In SCUC formulations, the set of constraints generally include: generation capacity limits; minimum run and down times; ramp up and down rates; operating, regulation, and spinning reserve requirements for multiple zones; fuel constraints by generator, area or system; environmental constraints, such as SOx and NOx emissions; interruptible load contracts; hydro reservoir volume limits and targets; discharge limits; natural inflows; maximum spillage; delay times; forbidden zones; energy limits; maintenance schedules; inter-area and inter-zone flow limits, etc. [5].

Nowadays, the optimization techniques applied to these types of problems have been experimental and evolutionary, and as a consequence, become important players in modeling and execution of UC problems.

As a general example, a UC problem can be mathematically represented as a nonlinear optimization formulation as follows:

Subject to:

Global constraints

Power balance equation:

Reserve capacity:

Local constraints

Unit generation limits:

Ramp limits:

Minimum on/off limits:

where, Dt is the total system load at period t [MW]; Rt is the total system reserve at period t [MW]; Cpg, t is the generation cost [$] of unit g at period t; Cupg, t is the startup cost [$] of unit g at period t; Cdowng, t is the shutdown cost [$] of unit g at period t; ug,t is the status variable that indicates if unit g is on (1) or off (0) at period t; sg, t is the startup status that establishes if unit g goes into service at period t; zg, t is the shutdown status that tells if unit g changes from on to off at period t; xg, t is a positive/negative variable that sets the number of periods the unit is on/off at period t; G is the number of generators; T is the total simulation time; pg, t is the power generation of unit g at period t is the minimum power limit of unit gis the maximum power limit of unit g; MUTg is the minimum time that unit g must remain on when it is set to on; MDTg is the minimum time that unit g must remain off when is set to off; URg is the maximum ramp up limit of unit g and DRg is the maximum ramp down of unit g [6].

The output from solving this mathematical formulation represents the set of generators that will be set to on for each period. This information is given by the value of binary variable ug,t.

2.2 Economic Dispatch

Once the UC process is completed, the next step is to solve the ED problem, the solution of which is also used for day-ahead, rescheduling, intraday, and real-time markets. The objective of ED problem is to minimize the total operational cost by taking into consideration the constraints related to the power balance and the unit limits. Mathematically, the ED problem can be described as follows:

Subject to:

Power balance equation:

Unit generation limits:

where UC is a subset of G, representing the number of units that the prior UC problem established as committed [7].

2.3 Optimal Power Flow

The OPF solves the ED problem by adding additional constraints to the optimization problem. The key addition to the ED problem is the inclusion of network constraints. The OPF problem calculates the control and state variables which optimize a selected objective function and guarantee the secure operation of the system. Nowadays, with advances in optimization tools applied to power system problems, several new objectives and constraints are included into a traditional OPF problem. Mathematically, an OPF problem can be formulated as follows:

where x is the state variable vector, u is the control variable vector, p is the parameter vector, f is the objective function, g are power balance equations, h are the unit and system constraints, λ is the Lagrange multipliers vector related to the power balance equation, and μ is the Lagrange multipliers vector related to the units and system constraints [8].

2.4 Fuel Scheduling

In general, mainly for thermal units, the cost of fuel represents the majority of operating costs. Restrictions on fuel contracts or the transport of fuels generally mean that the UC must be calculated after considering very restrictive conditions.

Therefore, it is essential to formulate a fuel allocation strategy that allows for the use of long-term fuel consumption constraints within short-term fuel consumption targets in which the objective is to minimize the operational cost. Also, it is important to dispatch generation while optimizing the fuel consumption by considering constraints related to generation, transport, and availability of fuel [9].

In all these activities, the optimization methods from the operations research field play a significant role in the decision-making process associated with ED, UC, OPF, and even fuel scheduling.

3 Optimization Methods

Several optimization techniques have been applied to solve the types of problems described in the previous sections. These methods comprise a broad range of mathematical approaches, including the use of mathematical programming algorithms such as linear and nonlinear programming, dynamic programming, and interior-point methods. Other techniques include artificial intelligence (AI) methods, such as neural networks and fuzzy systems, and evolutionary methods, such as genetic algorithms and the simulated annealing [10].

Fig. 2 illustrates the relationship between the major decision-making tools in power system and the classical optimization problems.

Fig. 2 PES industry and classical optimization problem relationship.

The methods considered in this chapter can be classified as follows:

•Linear programming (LP).

•Mixed-integer programming (MIP).

•Decomposition methods.

•Stochastic programming (SLP).

•Artificial intelligence methods (AI).

These optimization methods can be classified into three main groups: (1) Deterministic methods, (2) stochastic methods, and (3) heuristic and artificial intelligence methods.

Deterministic methods include linear programming, mixed-integer programming, decomposition methods, and Lagrange relaxation techniques. Stochastic methods include Monte Carlo simulation, chance-constrained programming, Pareto curves, and risk management approaches. Finally, the genetic algorithm, particle swarm optimization method, and evolutionary methods are part of the artificial intelligence methods. Fig. 3 summarizes these methods. Although there are more methods, the most common ones are presented as examples to highlight the complexity of the problems. Several of these methods are further described in the next section.

Fig. 3 Optimization classification.

3.1 Linear Programming

In general, the objective functions of optimization problems related to power systems are mainly quadratic. However, they can be linearized around an operating point to make the problem amenable for solving using linear programming techniques. The main advantage of a linear programming approach is the guaranteed solution of a well-formulated problem. Besides, it is possible to solve a large-scale problem using linear programming in a reasonable time. Also, it is the natural way to start solving a complex optimization problem. Finally, most of the commercially available optimization software, particularly those applied to solving power system problems, includes robust and powerful linear programming algorithms. The main algorithms used in the linear programming techniques are the simplex methodology, revised simplex method, sequential linear programming, and interior point techniques [8].

3.2 Mixed-Integer Programming

The implementation of algorithmic solutions based on mixed-integer programming (MIP) began in the early 1960s with the development of two classical methods: (1) Cutting Planes algorithm and (2) branch and bound (B&B) methodology. However, significant innovations related to this method have emerged only during the last 20 years. These innovations and developments have allowed for the application of these methods in real-scale problems. Most of these advances have already been implemented in commercially available programs. Some of the latest advancements are: (1) Significant progress in linear programming algorithms; (2) development of numerical methods for scattered data systems; (3) different types of cuts; (4) preresolution of the problem and nodes; (5) flexible selection of variables, and (6) heuristic techniques [11].

3.3 Decomposition Methods

The decomposition methods were proposed to efficiently solve large-scale optimization problems, such as SCUC. These methods take advantage of the special structure of the problem, by iteratively solving small-scale problems. While these methods are general, their application depends mainly on the particular problem. The decomposition methods can be classified into two forms: (1) when variables are decomposed, or (2) when constraints are decomposed.

The Benders (decomposition) algorithm is usually applied when the restrictions (aka constraints) are decomposed. Hence, the Benders method is mostly used for SCUC-type problems. The Benders method decomposes the SCUC problem into a master problem and a subproblem. The master problem, such as the conventional UC, is represented at the first level of optimization and the signals from the network, commonly referred to as slices, are derived from the subproblems at the second level of optimization [12].

There are two primary applications for the Benders method: (1) when variables make the problem much more complex, and (2) when the master problem and the subproblem are of a different nature. For example, a general bi-level optimization problem can be formulated mathematically as follows:

where x1 are the variables considered at the first level and x2 are the variables considered at the second level. Then, the problem can be expressed as follows:

the function θ2(x1) represents the objective function of the following subproblem:

where π2 represents the dual variables of the constraints (known as shadow prices).

The dual formulation is:

The decomposition method above is presented as an example. For the ED problem, other decomposition techniques exist that have been successfully applied and we encourage the readers to investigate them. For example, dual decomposition, alternating direction method of multipliers, Dantzig-Wolfe reformulation, etc.

3.4 Stochastic Approaches

The stochasticity or uncertainty appears in all the power system problems described above. However, until recently, it was not possible to solve the optimization problems of large-scale systems considering this stochasticity explicitly. In this context, the uncertainty may be due to a lack of reliable data, or information about the future state of variables, such as the future demand, future prices, and the renewable energy contributions. Mathematically, as an example, a linear multistage stochastic problem can be represented as follows:

Subject to:

where w represents each scenario with probability p [13].

3.5 Artificial Intelligence Methods

Among the artificial intelligence (AI) techniques, the main algorithms applied in power systems are: artificial neural networks, fuzzy logic systems, genetic algorithm, particle swarm optimization, colony optimization, simulated annealing, and evolutionary computing. Some of the distinctive properties of AI methods are: (1) the ability to remember past findings; (2) the methods learn and adapt in their subsequent performances; and (3) the methods can plan their path forward and act intelligently by mimicking human or social intelligence. Improved or hybrid AI methods have been developed by combining the advantages of various search methods [14].

4 Applications of Optimization Methods on Emerging Challenges

4.1 Smart Grid Applications

For the optimization problem of a traditional power system, the model is typically based on the estimate of the network's state. However, the optimization problem of a Smart Grid (SG) scenario, in general, will rely on real-time information thanks to the developments of advanced metering infrastructure (AMI) and two-way communications system [15].

One important feature of the Smart Grid is the widespread installation of distributed generations (DG) which include renewable energy sources, microturbines, fuel cells, etc. From the optimization perspective, DGs introduce additional uncertainties into the model. This additional set of uncertainties makes resource scheduling decisions very challenging. For example, it is generally difficult to predict, with any accuracy, near-term or real-time wind speed and wind availability.

The potential deployment of massive DGs suggests that additional optimization areas need to be explored to solve the following problems associated with the strategic placement of DGs in the network: (1) to improve the grid reinforcement, (2) to reduce the losses and the on-peak costs, (3) to improve the voltage profiles, and (4) to improve the security, reliability, and efficiency of the system.

With regards to the model implementation, it is critical to assess the computational performance in solving the power flow problem in SGs. For example, the new communication networks provide faster updates of network information, and the incorporation of phasor measurement units (PMUs) require new analytic tools with more rapid decision-making capabilities.

Volt/Var optimization tools have become popular within the SGs infrastructure. Incorporating variables and constraints related to the reactive part of the model adds another level of complexity. One approach to simplify this problem is to implement the concept of conservative voltage reduction (CVR). The purpose of CVR is to lower the voltage utilization at the end-use consumers such that their energy consumption decreases. Among the potential benefits made possible by this scheme, the most important is peak load reduction, and consequently, the reduction in power supply