The Purchasing Policy Based on Robust Optimization in the Electric Power Supply Chain under Cost Uncertainty

Abstract

With the national policy reforming, how to decide the power purchasing policy under the uncertain fuel cost becomes the important question for the power grid enterprises in the Chinese electric power supply chain. Usually, the stochastic programming models have often been used for the solution. A new robust optimization model was built and the numerical experiment results were compared with the results from the stochastic programming model. The results show that the robust optimization model is more flexible than the stochastic programming model in the worst situation. Comparing with the result from the stochastic programming, with the small uncertainty range the robust optimization's objective function may have higher value. The solution based on the application of both the robust model and the stochastic model was suggested in response to the required robustness and uncertainty level.