Forward thresholds for operation of pumped-storage stations in the real-time energy market

Goran Vojvodic, Ahmad I. Jarrah and David P. Morton

European Journal of Operational Research, 2016, vol. 254, issue 1, 253-268

Abstract: Pumped-storage hydroelectric plants are very valuable assets on the electric grid and in electric markets as they are able to pump and store water for generation, thus allowing for grid-level storage. Within the realm of short-term energy markets, we present a model for determining forward-looking thresholds for making generation and pumping decisions at such plants. A multistage stochastic programming framework is developed to optimize the thresholds with uncertain system prices over the next three days. Tractability issues are discussed and a novel method based on an implementation of the scatter search algorithm is proposed. Given the size of the multistage stochastic programming formulation, we argue that this novel method is a more accurate representation of the decision process. We demonstrate model stability and quality, and show that the forward thresholds obtained using a stochastic programming framework outperform the forward thresholds from a deterministic model, and thus can lead to efficiency gains for both the generation unit owner and the overall system in the real-time market.

Keywords: Stochastic programming; OR in energy; Large scale optimization; Metaheuristics; Energy markets (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:254:y:2016:i:1:p:253-268

DOI: 10.1016/j.ejor.2016.03.020

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