Economic Dispatch and Duality

Question 2. (40 points). Economic Dispatch and Duality Below is a basic economic dispatch problem and its dual. This basic economic dispatch problem is a special case that does not consider transmission constraints. The minimum outputs of the units are assumed to be OMW. Primal: Dual: Min: EgeG Cgpg Max DA - EgeG Pinax ag s. t. . s.t. . EgEG Pg = D, (7) 2 - ag SCg, 6A (Pg) -Pg 2 - Pmax BA (ag) ag 2 0, 6A Pg 2 0, 6A 2a) (8 points) What does EgeG Panax ag represent? Give an economic interpretation regarding this term and explain. Here are some hints: generation cost; generation revenue; generation profit; load payment; congestion cost; congestion revenue; capacity revenue; capacity rent. Additional hint: you may or may not need to examine properties regarding complementary slackness. 6 2b) (8 points) Explain the strong duality relationship of this primal dual pair (what does it economically tell us). 2c) (8 points) Prove or Disprove: It is possible for the optimal solution to be such that: for some g, A 0. This states that there is a generator that is producing while the market clearing price is below its marginal cost. Refer only to the structure of the economic dispatch formulation given on the pervious page