Generation Rights Trading Model Based on Constraint Violation Slack Variable Strategy (CVS)

In electricity market environments, generation rights trading serves as a crucial mechanism for optimizing resource allocation. This paper presents a Constraint Violation Slack Variable Strategy-based Generation Rights Trading Model (CVS), which formulates an optimization framework accounting for multiple constraint conditions.

The core innovation of this model lies in its constraint violation slack variable strategy for handling complex power system constraints. The implementation primarily addresses three constraint categories: Power Flow Constraints: Ensures post-trading power flow distribution complies with physical laws and security requirements through nodal power balance equations and line thermal limits Carbon Emission Constraints: Imposes caps on total carbon emissions during generation processes to align with energy conservation policies, typically implemented via emission coefficient matrices Voltage and Reactive Power Constraints: Maintains system voltage stability and reactive power balance through voltage magnitude bounds and reactive power injection limits

The model employs a Central Correction Interior Point Method as its solution algorithm, which demonstrates superior convergence and computational efficiency for large-scale nonlinear optimization problems. By introducing constraint violation slack variables, potentially infeasible problems are transformed into feasible optimization formulations, while penalty terms ensure minimal constraint violations. The algorithmic implementation involves: - Constructing Lagrangian functions with logarithmic barrier terms - Solving Karush-Kuhn-Tucker conditions via Newton-Raphson iterations - Adaptive step-size control for constraint boundary handling

Practical applications demonstrate the model's capability to: Balance economic efficiency and system security Simultaneously address generation companies' profitability and environmental requirements Provide scientific decision-making foundations for electricity market transactions

This modeling approach proves particularly suitable for generation rights trading under dual contexts of electricity market reform and carbon reduction initiatives, offering system operators an effective decision-support tool for market clearing and dispatch optimization.