Computation of competitive market equilibrium in hydrothermal power systems with cascaded reservoirs

In a competitive electricity market, generation companies have to maximize their benefits selecting the best strategy; therefore it is convenient to previously know the resulting spot prices. This paper presents a model to determine market clearing prices and hourly generation levels of each participant over a 24-hour period, including hydrothermal constraints. The optimal competitive market equilibrium problem is formulated as a large-scale mixed integer linear programming algorithm and is solved by using an optimization package. The model incorporates the following elements: thermal plants (maximum up and down ramp), hydro units, hydro systems (cascaded reservoirs, spillway flow, generator I/O characteristic), and inelastic demand. Numerical tests of a day ahead market are presented.