Hydropower bidding using linearized start-ups

Abstract

Hydropower producers must submit bids to electricity market auctions where they state their willingness to produce power. These bids may be determined using a mixed-integer linear stochastic program. However, for large interconnected river systems, this program may be too complex to be solved within the time limits set by current market rules. This paper investigates whether a linear approximation to start-ups can be used to reduce the computational burden without significantly degrading the solution quality. In order to investigate the trade-off of time versus solution quality, linear approximation is compared to a formulation that uses binary variables in a case study that simulates the operation of a reservoir system over time.