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Hydro-thermal power market equilibrium with price-making hydropower producers

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  • Löschenbrand, Markus
  • Wei, Wei
  • Liu, Feng

Abstract

This paper formulates an electricity market dominated by price-making hydro-thermal generation. Generation companies optimize their unit commitment, scheduling and bidding decisions simultaneously as a Mixed Integer Programming problem and participate in a market under quantity competition, giving rise to a discontinuous Nash-Cournot game. Both hydropower and thermal units are considered as price-makers. The market equilibrium under uncertainty is computed via time stage decomposition and nesting of a Continuous Nash game into the original Discontinuous Nash game that can be solved via a search algorithm. To highlight applicability of the proposed framework, a case study on the Scandinavian power market is designed and suggests positive welfare effects of large scale storage, whereas the implications on scheduling of conventional units are subsequently discussed. Reformulation allows computationally efficient scaling of the problem and possible extensions to allow large scale applications are discussed.

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  • Löschenbrand, Markus & Wei, Wei & Liu, Feng, 2018. "Hydro-thermal power market equilibrium with price-making hydropower producers," Energy, Elsevier, vol. 164(C), pages 377-389.
    • Handle: RePEc:eee:energy:v:164:y:2018:i:c:p:377-389
    DOI: 10.1016/j.energy.2018.08.162
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    Cited by:

    1. Scheben, Heike & Hufendiek, Kai, 2023. "Modelling power prices in markets with high shares of renewable energies and storages—The Norwegian example," Energy, Elsevier, vol. 267(C).
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    3. Löschenbrand, Markus, 2020. "Finding multiple Nash equilibria via machine learning-supported Gröbner bases," European Journal of Operational Research, Elsevier, vol. 284(3), pages 1178-1189.

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