Electric Power Demand Portfolio Optimization by Fermionic QAOA with Self-Consistent Local Field Modulation

TL;DR

This paper introduces FQAOA-SCLFM, an improved quantum algorithm for electricity demand portfolio optimization that outperforms existing methods by effectively integrating constraints through self-consistent local field modulation.

Contribution

The paper presents a novel FQAOA variant with self-consistent local field modulation, enhancing constraint handling in electricity demand portfolio optimization.

Findings

FQAOA-SCLFM outperforms XY-QAOA and previous FQAOA in all tested instances.

The new algorithm effectively incorporates power constraints via local field modulation.

Demonstrates improved optimization performance in electricity demand portfolios.

Abstract

Quantum Approximation Optimization Algorithms (QAOA) have been actively developed, among which Fermionic QAOA (FQAOA) has been successfully applied to financial portfolio optimization problems. We improve FQAOA and apply it to the optimization of electricity demand portfolios aiming to procure a target amount of electricity with minimum risk. Our new algorithm, FQAOA-SCLFM, allows approximate integration of constraints on the target amount of power by utilizing self-consistent local field modulation (SCLFM) in a driver Hamiltonian. We demonstrate that this approach performs better than the currently widely used $XY$-QAOA and the previous FQAOA in all instances subjected to this study.