Hydropower plant simultaneous biding in electricity market and ancillary services markets

Abstract

In a traditional environment, hydropower plant owners seek for minimum cost while in today deregulated environment goal function is profit maximization. Besides electricity only market, power producers can offer their services also in ancillary services markets. By doing so, it is possible to increase expected profit. This paper focuses on simultaneous hydropower plant biding in electricity and ancillary services markets, and purpose is to examine and verify effects of the proposed method on expected profit of hydropower plan owner. A mathematical model based on mixed integer programming approach is used. Head effect is also take into account with price-wise linear performance curves. Prices from real electricity markets and ancillary markets are used, and real hydropower system Lokve-Bayer in Croatia, with focus on hydropower plant Vinodol, is modelled. Obtained results show that there is a notable improvement in expected profit of hydropower plant if presented market bidding approach is used. It is also shown that hydropower plant Vinodol is capable for simultaneous bidding in different power markets.