A day-ahead market clearing model embedded with equivalent output bounds of cascaded hydropower

Cascaded hydropower operation is characterized by high dimensionality, nonlinearity, and upstream-downstream coupling, while also bearing multiple social responsibilities. These characteristics create significant conflicts between cascade hydropower operation and conventional electricity market clearing models, leading to risks of water spillage and contract violations. To address this issue, this paper proposes a novel day-ahead market clearing model that embeds equivalent hydropower output bounds. The model follows a “separation–embedding” framework. First, based on fundamental hydropower operation formulations, the hydraulic-power coupling constraints are mapped into output-related bounds, thereby eliminating nonlinearities in their formulation. Second, the terminal water level constraints are converted into total output bounds to enhance the engineering validity of the feasible region. Finally, these bounds are embedded into the conventional clearing model, replacing explicit hydropower operation constraints and yielding a concise and tractable clearing formulation. The proposed model captures the operational characteristics and social responsibilities of cascade hydropower, while remaining compatible with competition among multiple stakeholders. The resulting clearing model is of low complexity and structurally consistent. Numerical experiments under multiple scenarios in the China Southern Power Grid (CSG) show that the proposed model reduces the average solution time by 85.8%. It effectively mitigates water spillage, better satisfies multiple water-use demands, and enables effective end-of-day reservoir level control. The results also demonstrate significant robustness. In practice, the proposed model has been successfully applied in the CSG for nearly two years.