Application of the Matlab® Linprog function to plan the short term operation of hydro stations considered as price makers

The restructuring of power systems induced new challenges to generation companies in terms of adequately planning the operation of power stations in order to maximize their profits. In this scope, hydro resources are becoming extremely valuable given the revenues that their operation can generate. In this paper we describe the application of the Matlab^® Linprog optimization function to solve the Short Term Hydro Scheduling Problem, HSP, admitting that some stations are installed in the same cascade and that some of them have pumping capabilities. The optimization module to solve the HSP problem is then integrated in an iterative process to take into account the impact that the operation decisions regarding the hydro stations under analysis have on the market prices. The updated market prices are then used to run again the HSP problem thus enabling considering the hydro stations as price makers. The developed approach is illustrated using a system based on the Portuguese Douro River cascade that includes 9 hydro stations (4 of them are pumping stations) and a total installed capacity of 1485 MW.