Unit Commitment Model

This section outlines the two-stage, sequential optimisation framework we developed to forecast electricity prices and dispatch outcomes in the NEM. This approach mirrors how most grids think about dispatch, as it makes it possible to capture the effects of physical limitations such as minimum stable levels and expensive start up costs, as well as the varied bidding behaviour of generators.

Stage 1: Unit commitment

In the first stage, the model determines the optimal commitment status of thermal generation units across the forecast horizon. This is the initial run to optimise startup and shutdown for thermal technologies which have high startup costs and slow ramping. This first stage model run results in the commitments of black coal, brown coal / lignite, CCGTs, and OCGTs, which are then incorporated as an input to the second stage run. All other technology types are automatically set as committed and allowed to dispatch at optimal system cost in the second run.

Stage 2: Economic re-dispatch

Building on Stage 1, the second stage performs economic dispatch, incorporating both unit availability and economic bidding behaviour. Units that are offline in the Unit Commitment are now excluded, units that are online are forced to stay online. This is done by them bidding their minimum stable level at the price floor. The model then accounts for the bidding behaviour of each generator and cross-optimises transmission, generation, and storage in order to meet demand. We go into more detail of how each technology type is modelled in future sections.