Economic impact of nonutility generation on hydrothermal systems with variable head hydro units

Nonutility generation (NUG) has become a major consideration in the energy planning of most utilities in North America. For an effective relationship, both parties need to consider the economical and technical interface issues that impact planning and operation. The buyback rate that a utility uses to pay for the energy in the short term is evaluated based on the avoided operating cost (AOC). A technique has been presented in this paper that can be utilized to evaluate the AOC in a variable head hydrothermal system. This technique is based on the optimal operation of the hydrothermal system both before and after the utilization of NUG energy. The IEEE-RTS has been utilized to provide some numerical examples. Some sensitivity studies have been performed and the results are discussed in the paper