A dynamic approach for the optimal electricity dispatch in the deregulated market

The electricity market has been experiencing the deregulation process in many countries. Effective approaches to the management of single power plants or groups of plants are therefore becoming crucial for the competitiveness of energy utilities. A dynamic programming approach is presented in this paper for the optimal plant management in the new Italian deregulated market. A thorough description of the method is given in cases of free or fixed production over time (e.g. when the overall production is limited by bilateral contracts or cogeneration). Analysis of market characteristics, detailed thermodynamic models of plant operation and reliable price forecasts over the time period of interest are required. The suggested approach is useful for both long-term scheduling and planning daily offers in the market. (C) 2004 Elsevier Ltd. All rights reserved.