Methodology for determining the energy deficit penalty function for hydrothermal dispatch

The penalization of the objective function due to energy deficits is a key element for determining the operational policy of hydroelectric reservoirs. Its definition impacts not only operations, but also system expansion. Brazil historically defined these penalties with basis on a proxy of the economic deficit cost, a value in $/MWh obtained with aid of the Input-Output Matrix. We propose an approach where these penalties are obtained in order to minimize the operation cost and cost of rationing of the system, considering a criterion of security of supply. A case study with data from the Brazilian System illustrates its application.