A New Lagrangian Relaxation Method for the Cumulative Capacity Expansion/Retirement Problem

H. Magori, Y.C. Zhou, S. Machi, and R. Yokoyama (Japan)


Capacity expansion/retirement problem, Lagrangian Relaxation, Dynamic Programming, Heuristics


Generation Expansion Problem is a hard problem to solve because it is a nonlinear combinatorial one with an ill-posed nature arising from cumulative cost terms. This paper presents a capacity expansion/retirement model which is a simplified general OR-model for Ge neration Expansion Problem and proposes a new Lag rangian relaxation method to solve the model. Simu lation by the proposed method yielded promising near optimal solutions in few seconds, which implies that the method will be suitable for Generation Expansion Problem and can be extensible to the more compli cated formulations.

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