A Case Study for maximizing Hydroelectric annual revenue on Brazilian Power Market

Abstract

In the countries where most of the generation is hydroelectric, the long term operation planning is performed using techniques of decision making under uncertainties, due to the nature of water inflows. Also, in power systems with these characteristics which are in the process of deregulation, rules were designed in a way that generators could simultaneously profit and be protected from the risk of uncertainties. In the case of the Brazilian power market, the plan of operation defines the maximum energy a power plant can sell in a specific year but allows facilities to distribute it among the months of the year of the contract. Once the energy price is defined based on stochastic simulations, different strategies of generation distributions can be simulated and used to determine the expected profit, considering the energy available for the forthcoming year along with the short-run price of the power market. In this paper, a case study for maximizing the revenue of hydroelectric in Brazil is presented in which experiments using the Itaipu power plant were performed and discussed to illustrate the expected outcomes.