A Linear and Scalable Cutting-Plane Algorithm for Electricity Pricing
Optimization and Control
2025-04-15 v1
Abstract
We propose a linear cutting-plane pricing algorithm tailored for large-scale electricity markets, addressing nonconvexities arising from the Alternating Current Optimal Power Flow equations. We benchmark our algorithm against a Direct Current (DC) approximation and the Jabr Second-Order Cone (SOC) relaxation under both the Integer Programming and Convex Hull pricing rules. We provide numerical results for a small (617-bus) and three large (-bus) networks. Our algorithm yields price signals very close to the Jabr SOC, with computation times comparable to DC once we allow for warm-starts, including scenarios with line contingencies.
Cite
@article{arxiv.2504.09008,
title = {A Linear and Scalable Cutting-Plane Algorithm for Electricity Pricing},
author = {Matías Romero and Felipe Verástegui and Matías Villagra},
journal= {arXiv preprint arXiv:2504.09008},
year = {2025}
}