O.R. Applications An improved unit decommitment algorithm for combined heat and power systems Aiying Rong a, * , Risto Lahdelma b , Martin Grunow a a Technical University of Denmark, Department of Management Engineering, Produktionstorvet 425, 2800 Kgs. Lyngby (Copenhagen), Denmark b University of Turku, Department of Information Technology, Joukahaisenkatu 3, FIN-20520 Turku, Finland Received 28 June 2007; accepted 12 February 2008 Available online 19 February 2008 Abstract This paper addresses the unit commitment in multi-period combined heat and power (CHP) production planning, considering the possibility to trade power on the spot market. In CHP plants (units), generation of heat and power follows joint characteristics, which means that production planning for both heat and power must be done in coordination. We present an improved unit decommitment (IUD) algorithm that starts with an improved initial solution with less heat surplus so that the relative cost-efficiency of the plants can be determined more accurately. Then the subsequent decommitment procedures can decommit (switch off) the least cost-efficient plants properly. The improved initial solution for the committed plants is generated by a heuristic procedure. The heuristic procedure utilizes both the Lagrangian relaxation principle that relaxes the system-wide (heat and power) demand constraints and a linear relaxation of the ON/OFF states of the plants. We compare the IUD algorithm with realistic test data against a generic unit decommitment (UD) algo- rithm. Numerical results show that IUD is an overall improvement of UD. The solution quality of IUD is better than that of UD for almost all of tested cases. The maximum improvement is 11.3% and the maximum degradation is only 0.04% (only two sub-cases out of 216 sub-cases) with an average improvement of 0.3–0.5% for different planning horizons. Moreover, IUD is more efficient (1.1–3 times faster on average) than UD. Ó 2008 Elsevier B.V. All rights reserved. Keywords: Combined heat and power production; Unit commitment; Energy optimization; Unit decommitment; Deregulated power market 1. Introduction Combined heat and power (CHP) means the simulta- neous production of useful heat and electric power. When steam or hot water is produced for an industrial plant or a residential area, power can be produced as a by-product. Vice versa, surplus heat from an electric power plant can be used for industrial purposes, or for heating space and water. Compared to separate generation of heat in boilers and power in condensing plants, CHP systems offer consid- erably higher energy efficiency levels, up to 90%, that lead to fuel (and emissions) savings of typically between 10% and 40% (Madlener and Schmid, 2003). Therefore, CHP becomes an increasingly important power production tech- nology for efficient utilization of primary energy resources and for reducing CO 2 emissions. Utilization of CHP tech- nology can result in significant energy savings when both power and heat is needed. The key to successful CHP is to design the plant according to the heat demand of the sys- tem. A CHP system may consist of CHP plants, condens- ing plants and heat plants (boilers) that are connected by heat and power transmission networks. Because of the large costs involved, efficient operation of the generating plants (units) in the power system is desir- able. The unit commitment (UC) requires scheduling the units economically. The goal in UC is to determine when to start up and shut down the plants and how to dispatch the committed units to meet (forecast) demand and other constraints cost-efficiently. The former decision is called 0377-2217/$ - see front matter Ó 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.ejor.2008.02.010 * Corresponding author. Tel.: +45 45254768; fax: +45 45256005. E-mail addresses: aiying.rong@gmail.com, ar@ipl.dtu.dk (A. Rong). www.elsevier.com/locate/ejor Available online at www.sciencedirect.com European Journal of Operational Research 195 (2009) 552–562