A novel strong duality-based reformulation for trilevel infrastructure models in energy systems development

Abstract

We explore the class of trilevel equilibrium problems with a focus on energy-environmental applications and present a novel single-level reformulation for such problems, based on strong duality. To the best of our knowledge, only one alternative single-level reformulation for trilevel problems exists. This reformulation uses a representation of the bottom-level solution set, whereas we propose a reformulation based on strong duality. Our novel reformulation is compared to this existing formulation, discussing both model sizes and computational performance. In particular, we apply this trilevel framework to a power market model, exploring the possibilities of an international policymaker in reducing emissions of the system. Using the proposed approach, we are able to obtain globally optimal solutions for a five-node case study representing the Nordic countries and assess the impact of a carbon tax on the electricity production portfolio..

Olli Herrala

Doctoral Researcher

Olli Herrala is a Doctoral Candidate in the Systems Analysis Laboratory in Aalto University.

Fabricio Oliveira

Associate Professor of Operational Research

Fabricio Oliveira is an Associate Professor of Operational Research in the Department of Mathematics and Systems Analysis.