This paper deals with a decision making methodology to determine the optimal generation dispatch and environmental marginal cost for power system operation with multiple conflicting objectives. Typically, these will conflict in that there is no feasible solution which simultaneously minimizes them all. In such a case, some form of conflict resolution must be adopted to arrive at a solution. In this particular study, the generation dispatch problems are formulated as a multiple objective optimization problem with two non-commensurable objectives (economy and environmental impacts) Each objective is optimized by Powell's method in the light of individual performance index. Goal programming technique (GP) which is one of the most powerful tools for multiple criteria decision making (MCDM) is quantitatively performed to grasp trade-off relations among these conflicting objectives. After the trade-off relation has been determined, the idea of sensitivity analysis is applied to evaluate the Environmental Marginal Cost which indicates the increased portion (amount of money) of the cost of system operation while the impact on environment is improved. This methodology can aid the final decision maker (power system operators, for instance) to choose the optimal operating points over the trade-off curve and adjust the generation levels in the most economic manner. Therefore, dispatching of the generation system under the hourly changes commonly occurring in a power system can be carried out easily and flexibly under either operator or computer control by using the small data base created by the GP algorithm for various operational conditions. Ultimately, numerical examples on a sample power system consisting of 10 busses, 11 transmission lines and 5 generators are provided to demonstrate the capabilities of the proposed approach. © 1990 IEEE
