How should generators (‘units’) with different energy costs, different
miniumum and maximum levels of operation, and different start-up costs
be assigned to satisfy a time profile of electricity demand? In PWP-054,
two very simple models of this "unit commitment problem" are studied -
both in the context of uncertainty about future demand. The preliminary
objective of McGuire’s analysis is to find optimal commitment strategies
for the manager of a system of generators. The main objective is
to suggest models of power-generation technology sufficiently simple to
make possible the exploration of efficient power-auction design.
Small steps toward both goals are described.