Hydro-Wind Balance in Daily Electricity Markets: A Case-Study

Abstract

The European Union has been one of the major drivers of the development of renewable energy. In Portugal, renewable generation is subject to specific licensing requirements and benefits from a feedin-tariff. This paper pays special attention to wind and hydroelectric technologies. Typically, wind farms produce more energy during the night (off-peak periods), when the demand is lower, contributing to a reduction of the market price. Hydroelectric power plants use off-peak periods to pump water, and produce energy in the periods of a 24 hour day where the prices of electricity are higher (peak periods). This paper presents a case study aiming at analyzing the behavior of hydroelectric power producers-that is, in power systems with large renewable generation, producers typically use the periods of the day with lower energy prices for pumping, and the other periods (with higher energy prices) to produce electricity. The simulations are performed using MATREM (for Multi-Agent Trading in Electricity Markets). The results confirm (and rebate) the typical behavior of hydroelectric power producers.

Strategic Operation of Hydroelectric Power Plants in Energy Markets: A Model and a Study on the Hydro-Wind Balance

“…In our previous work [22], we performed a preliminary analysis of the hydro-wind balance in the Portuguese electric system. Specifically, we conducted a simulation-based study and confirmed the (well-known) conclusions that HPPs consider the hours with low market prices (normally involving a high wind power level and/or a low demand) to pump, and the hours with high market prices (normally peak hours with a high demand) to produce energy.…”