Optimizing Deep Decarbonization Pathways in California with Power System Planning Using Surrogate Level-based Lagrangian Relaxation

With California's ambitious goal to achieve decarbonization of the electrical grid by the year 2045, significant challenges arise in power system investment planning. Existing modeling methods and software focus on computational efficiency, which is currently achieved by simplifying the associated unit commitment formulation. This may lead to unjustifiable inaccuracies in the cost and constraints of gas-fired generation operations, and may affect both the timing and the extent of investment in new resources, such as renewable energy and energy storage. To address this issue, this paper develops a more detailed and rigorous mixed-integer model, and more importantly, a solution methodology utilizing surrogate level-based Lagrangian relaxation to overcome the combinatorial complexity that results from the enhanced level of model detail. This allows us to optimize a model with approximately 12 million binary and 100 million total variables in under 48 hours. The investment plan is compared with those produced by E3's RESOLVE software, which is currently employed by the California Energy Commission and California Public Utilities Commission. Our model produces an investment plan that differs substantially from that of the existing method and saves California over 12 billion dollars over the investment horizon.