Strategic unit commitment for generation in deregulated electricity markets

In this chapter we address some of the new short-term problems that are faced by a generation company in a deregulated electricity market, and we propose a decision procedure to address them. Additionally, we propose a strategic unit commitment model, which deals with the weekly operation of the firm's generating facilities. In it we combine traditional cost-evaluation techniques and technical constraints that grant a feasible schedule with new market-modeling equations. We suggest strategic constraints that allow the accomplishment of the firm's medium-term objectives, We have formulated the model as a mixed-integer-programming problem and solved it by means of a commercial algorithm, instead of using the traditional Lagrangian relaxation approach. Results of the application of the method to a numerical example are presented. The procedure is a simplified version of one of several tools currently being used by a leading Spanish generation company, Iberdrola, for the weekly operation of its generation assets in the Spanish wholesale electricity market.