Hourly-discretized mid-term power system operation in a competitive energy market

This paper presents an optimization-based method to model the mid-term operation of a hydrothermal power system in a competitive market. Two market structures are examined: perfect competition and oligopoly comprising a dominant firm with a competitive fringe. In the latter, the dominant firm bidding strategy is determined by solving a profit maximization problem; forward contracts are also modeled. Producers submit offers to a day-ahead market, which is cleared by the system operator on a bid-cost minimization basis. A yearly planning horizon with hourly time intervals is adopted. A real size hydrothermal system, similar to the Greek Power System, is used for our tests. Hourly thermal unit commitment and start-up / shut-down decisions, market clearing prices, hydroplant generation / pumping and reservoir volumes, monthly price duration curves, ISO payment and thermal producer profits are among the results obtained.