F.T. Sparrow

A new long-term hydro production scheduling method for maximizing the profit of hydroelectric systems

This paper presents a new long-term hydrothermal production scheduling method. The proposed method maximizes the profit of hydroelectric plants, based on the monthly energy requirement of the system, instead of minimizing the production cost of thermal units. It is shown that different forms of composite thermal marginal costs will lead to the same hydro production schedule. Thus a linear marginal cost, the simplest form, is sufficient for long-term hydrothermal scheduling. A linear hydro marginal profit is also sufficient for this purpose. An immediate conclusion is that an actual composite thermal cost function, which is complicated by thermal unit availability, may not be needed for the long-term optimal hydrothermal scheduling. Due to this simplification, traditional long and mid-term hydrothermal scheduling, a complicated problem, becomes easier to solve. The method can be used by the owners of independent hydro plants in a region for long-term hydroelectric scheduling under both deregulation and competition. A case study shows that the model allocates successfully and efficiently the hydroelectric resources to peak demand periods with negligible computation time.

A Stackelberg price leadership model with application to deregulated electricity markets

This paper presents a Stackelberg price leadership model for simulating deregulated electricity markets consisting of one or a few large producers and a larger number of fringe producers. It is assumed that the large producer(s) would adopt oligopoly strategy using their market power while the small producers would use Bertrand-like strategy. The model is a multi-objective profit maximization program. The multi-objectives are converted into the same number of partial Lagrangian functions with power production and supply as the control variables. A set of KKT conditions is then derived considering the game strategies of the producers. Test results show that the model successfully produces a total profit that is greater than that profit from a welfare maximization model but is less than that from a collusion model. Producers who adopt Cournot strategy are better off with higher profits as compared with marginal cost pricing.

Modeling electricity trade policy for the twelve nations of the Southern African Power Pool (SAPP)

Abstract The benefits from a centralized and competitive dispatch, compared with existing bilateral electricity trade agreements are determined to be about

Market gaming and market power mitigation in deregulated electricity markets

100 million per year in the 12-nation Southern African Power Pool (SAPP). Generation, transmission, and costing variables are uniquely incorporated into a short-term cost minimizing mixed integer linear programming model, to determine the optimal unit commitment and dispatch across this 12-nation pool of the Southern African Development Community (SADC) region of Africa. Costs are minimized from increasing the use of existing hydropower facilities in the Democratic Republic of Congo (DRC), Zambia, and Mozambique and reducing fuel costs primarily in South Africa.

On convexity issues of short-term hydrothermal scheduling

Market gaming is a daily routine in a deregulated electricity market. It has been reported extensively that producers have been gaming in the England and Wales power market ever since the market was deregulated. In June 1998, wholesale electricity prices settled at

A large oligopoly competition model with an application to the Midwest electricity markets

7000/MWh in the Midwest US market. The replacement power prices settled at

A locational gaming model with CO2 emission tax and limits

9999/MWh on July 13, 1998 in the newly formulated California Power Exchange. Market power abuses have caught the concern and attention of the Federal Energy Regulatory Commission, state regulatory commissions, and consumer groups. This paper examines different forms of electricity market power abuses and suggests mitigation strategies to minimize the effect of market power on the fledgling competitive markets in the US.

Solar subsidies and economic efficiency

This paper introduces a convex and normally constrained hydrothermal scheduling method. Convexity is achieved by using a hydro water loss term and a piece-wise linear representation of the relationship between water head and volume. A basic technique is developed for obtaining normal constraints, developed for the first time in this paper, by converting the conditional constraints into unconditional constraints. An example of the conditional constraints is the hydrothermal unit on/off status being expressed as a function of the unit minimum up/down times. Unit start-up and shut-down variables are summed over the minimum-up time and the minimum-down time and the summations are being limited to one. In each case this is to prevent immature unit start-up or shut-down. This allows the hydrothermal scheduling problem to become an ordinary mixed integer problem that can be solved by using standard commercial mixed integer programming solvers. These solvers can be purchased on the market for a few thousand dollars, far below the prices of the specially designed hydrothermal scheduling software products from consulting firms. The algorithm developed in this paper is tested for different cases with good results, especially for small hydrothermal systems.

The Brookhaven process optimization models

This paper presents a large spatial gaming model with price caps for the Midwest electricity markets. Price caps are enforced in several deregulated regional electricity markets in the USA, a logical step is to reflect this reality in imperfect competition modeling. Unfortunately, most current gaming models have not included any price cap formulation. This paper is one of the first to address the issue. A transportation formulation is used for representing the spatial nature of an electrical network. An algorithm is proposed to find a Nash equilibrium under the enforcement of price caps based on the Kuhn-Tucker vector optimization theorem. Case studies show the successful application of the model. The conclusion is that, given appropriate price caps, market power impact can be reduced in the short run.

The cost of uncertainty in capacity expansion problems

Abstract This paper presents a locational (spatial) gaming model with CO 2 emission and transmission capacity limits. It is developed for simulating strategic behavior of electricity producers in deregulated electricity markets. The model has multiple players, each maximizing their individual profit with a CO 2 emission tax included to reflect the societal cost of environment damages caused by CO 2 emission from different locations. In the paper, the multiple-producer profits are converted into a set of Lagrangian functions with power production and supply as the primary control variables, resulting in a set of unconstrained, individual profit maximization equations. The Karush–Kuhn–Tucker necessary conditions are then derived and solved simultaneously incorporating Cournot gaming strategy. Case studies show the successful application of the model.