A simple piecewise bidding strategy for hydropower plant in liberalised electricity market

Hydropower producer is a participant with relative higher risk than thermal´s in respect of bidding to spot electricity market, since regulating storage is limited and is required to keep long-term valid. This paper provided a framework to obtain optimal bids for hydropower producer as a price-taker. The bidding model was established and a simple yet important optimization bidding equation was derived from the augmented Lagrangian functions. A three-sigma rule-based bidding method was proposed to form the piecewise bidding strategy. Results from a realistic case study were discussed.