Operational use of marginal cost curves for hydropower plants as decision support in real-time balancing markets

Abstract

When participating in the real-time balancing markets, hydropower producers keep making decisions about how much power they are willing to sell or purchase at what prices from the markets. Due to the specific market characteristics, the decisions should be made quickly, placing high demand on the computation time of rescheduling. In this paper, we present a practical method to determine an hourly bidding curve for a plant. It is applicable to both balancing and intraday markets. We heuristically calculate the marginal cost for all the operating points, covering the entire working area for the plant and including all the physical limitations and reserve obligations in other markets. Heuristics are proposed to reduce the computation time without neglecting significant practical features. Numerical results based on a real-world case study demonstrate the advantage of the proposed method in terms of computation time and solution quality.