Quota modeling in hydrothermal systems

This paper proposes methods for medium- and long term scheduling in hydrothermal power systems with different emissions quota schemes included. Based on techniques used for hydropower scheduling, which has similarities to quota handling, a solution for quota schemes with a fixed volume is established using stochastic dual dynamic optimization techniques (SDDP). Handling stochastic elements is a part of hydropower scheduling; in the paper we extend the SDDP approach adding quota markets with uncertain prices to the optimization model. Using the above approaches a set of options for handling quota systems is available, accounting for the situation that even though quotas are on the international agenda it is still uncertain exactly what quota scheme will be adapted. The paper presents results from two cases of quota modeling together with a description of the current Danish quota system. The first case shows modeling of a fixed quota and the second case deal with a quota market with uncertain prices.