Reliability analysis for systems with large hydro resources in a deregulated electric power market

This work describes a procedure that determines the optimal allocation for the yearly energy resulting from random water inflows to the different subperiods of a year so that the expected benefits are maximized. Its main idea is to distribute the energy stored in reservoirs in each period into two parts: one is directly sold in the energy market, while the other is made available to cover any unplanned outages of thermal units. The method proposed fulfills two objectives, to distribute the hydro energy optimally according to economic criteria and to assess the impact of new market rules on the reliability of an electric system. The procedure will be illustrated by an example based on the Spanish generating system.This work was supported by the Project PB-98-0728 of the Ministerio de Educación, Cultura y Deporte, Spain.Publicad

Dynamic Competition in Electricity Markets: Hydroelectric and Thermal Generation

We study competition between hydro and thermal electricity generators that face uncertainty over demand and water flows where the hydro generator is constrained by water flows and the thermal generator by capacity. We compute the Feedback equilibrium for the in?nite horizon game and show that there can be strategic withholding of water by the hydro generator. When water inflow is relatively low, however, the hydro generator may use more water than efficient as it faces an inefficiently low shadow price of water in this case. The inefficiency of the market outcome is tempered by the capacity constraints: for a large range of possible thermal production capacities and water flow levels, welfare loss under the duopoly market structure is much less than would occur in the absence of water and capacity constraints.Electricity markets; Electricity markets; Hydroelectricity; Imperfect Competition