Optimal Offering Strategy of a Price-Maker Hydro Producer Considering the Effects of Crossing the Forbidden Zones

Abstract

The phenomenon of crossing the forbidden zone is unavoidable and wasteful when scheduling the hydro units. In this paper, the effect of crossing the forbidden zone is taken into account using the strategic offering model to help the price-maker hydro producers (PMHPs) devise more economic offering strategies in this paper. This effect is economically quantified and formulated in the form of the mixed integer linear program (MILP) with the use of the big M method and the piecewise linear technique. Therefore, the effect of crossing the forbidden zone therefore can easily be incorporated into the strategic offering model. Based on the residual demand curve (RDC) scenarios, the strategic offering model, which consists of offering and self-scheduling models, is established according to the real-world data from the Three Gorges Project (TGP). The whole optimization model is then converted into the form of MILP formulations by properly discretizing the net head. A test case based on the TGP is presented, in which the strategic offering model is set as a comparable test while ignoring the effect of crossing the forbidden zone. The results provide insight on the offering strategy and physical system operations during a single day. The outcomes indicate that the model that incorporates the effect of crossing the forbidden zone will effectively prevent the crossing phenomenon from happening and that the proposed strategic offering model is more useful for assisting a PMHP in developing profitable offering strategy.

Keywords

• Hydro producer
• price-maker
• offering strategies
• self-scheduling
• crossing the forbidden zone