Optimization-based sale transactions and hydrothermal scheduling

Selling and purchasing power are important activities for electric utilities because of potential savings. When a selling utility presents an offer including prices, power levels and durations, a purchasing utility selects power levels and durations within the offered range subject to relevant constraints. The decision making process is complicated because transactions are coupled with power system demand and reserve, therefore decisions have to be made in conjunction with the commitment and dispatching of units. Furthermore, transaction decisions have to be made in almost real time in view of the competitiveness of the power market caused by deregulation. In this paper, transactions are analyzed from a selling electric utility's viewpoint for a power system consisting of thermal, hydro and pumped-storage units. To effectively solve the problem, linear sale revenues are approximated by nonlinear functions, and nonprofitable options are identified and eliminated from consideration. The multipliers are then updated at the high level by using a modified subgradient method to obtain near optimal solutions quickly. Testing results show that the algorithm produces good sale offers efficiently.