The Clean Air Act of 1990 mandated limits on the sulphur dioxide emission of coal-burning units by 1995 (Phase I) and 2000 (Phase II). The evaluation of options for economically complying with these limits is complicated by uncertainties in a number of key variables such as the price of emission allowances, the price premiums to be paid for low sulphur coal and other costs associated with viable, unit-specific compliance options: installing scrubbers, switching to lower sulphur coal and taking no compliance action. The problem is further complicated by the fact that minimum cost compliance options for individual units can only be determined as the units are committed and dispatched over time taking into account planned and expected forced outages. A method is proposed for solving this combined planning-operation optimization problem over a time horizon of interest using a fast unit commitment and dispatch heuristic. The method is applied to a large utility with 26 coal burning units subject to the provisions of the 1990 Clean Air Act. Representative runs indicate that the method generally converges to optimal solutions in 30 minutes or less on a personal computer. Thus, the planner can quickly explore the impacts of various assumptions regarding the prices of emission allowances, fuel premiums etc. upon optimal compliance options for individual units.
