Generation risk assessment in volatile conditions with wind, hydro, and natural gas units

Cem Sahin, Mohammad Shahidehpour and Ismet Erkmen

Applied Energy, 2012, vol. 96, issue C, 4-11

Abstract: This paper studies a generating company (GENCO)’s midterm (a few months to a year) scheduling payoffs and risks in volatile operating conditions. The proposed algorithm considers the integration of intermittent wind units into a GENCO’s generation assets and coordinates the GENCO’s hourly wind generation schedule with that of natural gas (NG) units (with volatile gas prices) and hydro units (with water inflow forecast) for maximizing the GENCO’s payoff. The proposed midterm GENCO model applies market price forecasts to the risk-constrained stochastic price-based unit commitment (PBUC) for calculating the GENCO’s risk in energy and ancillary services markets. The proposed PBUC minimizes the cost of (a) NG contracts, storage, startup and shutdown, (b) startup and shutdown of cascaded hydro units, and (c) penalty for defaulting on the scheduled power delivery. Simulation results show that the diversification of generating assets including bilateral contracts (BCs) could enhance the GENCO’s midterm planning by increasing the expected payoff and decreasing the financial risk.

Keywords: Stochastic price-based unit commitment; Financial and physical risks; Wind unit generation; Hydro unit constraints; Natural gas constraints; Bilateral energy contracts (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (16)

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DOI: 10.1016/j.apenergy.2011.11.007

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