Modelling Hydro Power Operations and Planning in

Electricity Markets
Snia Vilela
sonia.vilela@ren.pt

Prakash Thimmapuram
prakash@anl.gov

Helena Azevedo
helena.azevedo@ren.pt
REN Servios, S.A.
Portugal

Maria Natlia Tavares

marianatalia.tavares@ren.pt

Audun Botterud
Guenter Conzelmann
abotterud@anl.gov
guenter@anl.gov
Argonne National Laboratory University of Chicago
United States of America

Keywords: Hydro Power Plants, Deregulated Power Markets, Agent-Based Modelling, Iberian market, Wind
energy resources

Abstract
In this paper, we present the application of EMCAS-VALORAGUA, an integrated power system simulation
tool, to the Iberian Electricity Market (MIBEL). Three hydrological conditions (average, dry and wet) are
analyzed to study the role of hydro power plants in managing power systems. Also, the role of hydro power
plants in managing the uncertainties and to maximize the utilization of intermittent renewable energy resources
such as wind is analyzed.

Introduction
The Electricity Market Complex Adaptive System (EMCAS) is an agent-based modelling tool developed to
study the deregulated electricity markets, while VALORAGUA is a hydro-thermal coordination model used for
the optimization of power systems operations and management of hydro power plants and water reservoirs. The
integrated model has been described elsewhere [1] and applied to the Iberian Electricity Market to study both
short-term markets and long-term generation capacity expansion decisions [1, 2]. The model has also been
applied to study the impact of price forecasting and unit commitment decisions on power systems [3]. In this
paper, the model has been applied to study two different aspects, hydroelectric generation and hydrologic
variability; and the complementary hydro and wind generation along with their variability in the Iberian
electricity market.

System Configuration and Simulation

A power system configuration with aggregated transfer capacity between Portugal and Spain for the year 2007 is
used. All thermal, hydro, wind and other power plants are represented with their detailed technical and economic
characteristics. Even though both Portugal and Spain are included in the simulation, we present results only for
Portugal. The total installed generation capacity in Portugal was about 14,000 MW (Table 1) with an annual
energy demand of 49,510 GWh and a peak load of 9,110 MW (in December).
Any system studies that include hydroelectric component needs to consider the variability in the hydrological
conditions. This variability also influences the bidding behaviour of all agents participating in the electricity
markets. An index, Hydroelectric Availability Factor (IPH) that measures the availability of hydroelectric
energy is used to characterize the different hydrological conditions. This Iberian electricity market configuration
is simulated for three historical hydrologic years: average (corresponding to the year 1988 with an IPH of 1.07),
dry (corresponding to the year 1989 with an IPH of 0.62) and wet (corresponding to the year 1996 with an IPH
of 1.30). In the scenarios simulated and analyzed in this paper, the Gencos bid production cost for non-thermal
generating units and production cost plus a correlated price for thermal units. The production cost includes only
the fuel cost and variable O&M cost whereas the correlated price is based on the previous day bid price and bid
result.

Table 1 Generation Capacity in Portugal (2007)

Generation Type
Thermal (coal, natural gas etc.)
Hydro
Wind
Other
Total

Installed Capacity, MW
5,820
4,582
1,894
1,745
14,041

Hydroelectric Generation and Hydrologic Variability

VALORAGUA provides the seasonal management of hydroelectric system over the year and is re-optimized
weekly by repeated interaction with EMCAS, which supplies the updated weekly supply curves. In turn,
EMCAS uses the weekly targets for generation and pumping of hydro and pumped-storage plants to generate
hourly schedules. The integrated model provides a better hourly management and availability of hydro plants.
The monthly generation and pumping consumption for the Portuguese hydroelectric system for the three
hydrological conditions are presented in Fig. 1. Although the year1989 correspond to a dry year, December is the
most wet of the three simulated hydrological conditions, having a production of nearly 2500 GWh, almost onethird of annual generation, while the average generation of the first 11 months is around 500 GWh. The pumping
consumption is higher in the dry year, almost twice the pumping generation in the wet year.
3000

AVERAGE YEAR

2500
2000

2.5

3000

2.0

2500

2.5
2.0

2000

1.5

1500

1.5

1500
1.0

1000
0.5

500

(GWh)

(GWh)

DRY YEAR

Jan Feb Mar Apr May Jun

Jul

Aug Sep

Jan Feb Mar Apr May Jun

-0.5

Annual Hydro Generation

Annual Pumping Consumption

Average

Dry

Wet

14338

8018

15921

490

1182

Jul

Aug Sep

Oct Nov Dec

-500

3000

(GWh)

0.0

Oct Nov Dec

-500

0.5

500

0.0

1.0
1000

-0.5

WET YEAR

2.5

2500

2.0

2000

550

1.5

(GWh)

1500
1.0
1000
0.5

500

0.0

0
Jan Feb Mar Apr May Jun
-500

Jul

Aug Sep

Oct Nov Dec

-0.5

Fig. 1 Monthly hydro generation and pumping consumption

The January-daily generation, pumping consumption for dry and wet hydrological conditions are presented in
Fig. 2a and the related market prices (maximum, minimum and average) are presented in Fig. 2b. For a wet year,
the daily generation is stable around 95 GWh and is almost three times the maximum daily generation in a dry
year. However, the daily pumping in a wet year is much lower than in the dry year. The pumping consumption in
the wet year is a result of VALORAGUA avoiding the water spills in downstream cascades where as in the dry
year the market prices appear to have a strong influence on the pumping operations.

DRY YEAR

WET YEAR

100

100

80

80
60

(GWh)

(GWh)

60
40

40

20

20

0
-20

11

13

15

17

19

21

23

25

27

29

-20

31

Monthly Hydro Generation

11

13

15

17

19

21

23

25

27

29

31

Monthly Pumping Consumption

Fig. 2a Hydro generation and pumping consumption in January simulation for wet and dry years

WET YEAR

1000

1000

800

800

(/MWh)

(/MWh)

DRY YEAR

600

600

400

400

200

200

01-01-07

06-01-07

11-01-07

16-01-07

21-01-07

26-01-07

31-01-07

01-01-07

Average monthly price: 98 /MWh

06-01-07

11-01-07

16-01-07

21-01-07

26-01-07

31-01-07

Average monthly price: 45 /MWh

M aximum

Average

M inimum

Fig. 2b Market prices in January simulation for wet and dry years

The daily generation and pumping consumption for two days in an average hydrological year are shown in
Fig. 3. The two days (18th July and 19th September) are in the beginning and ending of the summer season. The
hourly forecasted market prices and simulated market prices are also presented in Fig. 3. In both days, a low
hydro generation is observed with a concentration in peak load hours. The pumping consumption occurred
mostly in base load hours in September. The hydro generation and pumping consumption are results of EMCAS
hourly optimization based on Genco projected prices.
19th September (Wednesday)
100.00

3500

100.00

3000

90.00

3000

90.00

50.00

30.00

1000

40.00

20.00

500

50.00

1000

40.00

-500

10

12

14

16

18

20

22

10.00
0.00

30.00
20.00

0
-500

Hours

Hydro Generation

(MW)

60.00

1500

1500

70.00

2000

60.00

500

80.00

2500

70.00

2000

10

12

14

16

18

20

22

10.00
0.00

Hours

Pumping Consumption

Projected Prices

Market Prices

Fig. 3 Hydro generation, pumping consumption, projected and simulated market prices

Complementary Hydro and Wind Generation

The increasing penetration of installed capacity of wind turbines and its consequent power output variations in
short time horizons create new challenges in the management of electrical generation systems. The integrated
model allows two modelling possibilities for this type of intermittent renewable component, using either a given
chronological hourly pattern or an hourly random pattern. In the hourly-random pattern, the hourly data is
randomly drawn within the month without repetition and the total monthly wind generation is same as in the
chronological hourly pattern.

(/MWh)

80.00

2500

(/MWh)

(MW)

18th July (Wednesday)

3500

The behaviour of the hydroelectric system for these two different approaches of the wind component is
simulated. In Fig 4, the hydro generation, pumping consumption and wind generation for the Portugal system
are presented for both chronological and random wind generation patterns.

(GWh)

Hydro
Pumping
Wind
Generation Consumption Generation

CHRONOLOGICAL
WIND

533

91

280

RANDOM WIND

490

40

280

Hydro Generation
Pumping Consumption
W ind Generation

Fig. 4 Hourly Wind Generation, Hydro generation and pumping consumption

These two cases represent the same total monthly wind generation but different hourly distributions within the
month. The integrated model adapts or adjusts the behaviour of the hydroelectric plants resulting in a different
pumping operations and hydro generation. In the current simulation, the pumping consumption, when
chronological wind pattern is used, is almost twice the pumping consumption when random wind generation
pattern is used. When chronological wind pattern is used, high wind generation in base hours (e.g. 19th, 20th,
29th and 30th hours of the month) resulted in higher pumping operations and hydro generation. This hydro/wind
complimentary can be easily observed in the hourly-analysis presented in Fig. 5, which presents all the system
components of power output for the days September 19th and 20th, when the chronological wind pattern is used.

GEN ERA TION

(GWh)

C oal

Heav y/Light
Oil

Import

W ind

Other

Natural Gas

Hydro

Load +
Pumping

Load

C onsumption

19th Sep

25.3

0.8

25.2

24.6

13.1

49.5

16.0

154.5

149.5

20th Sep

26.2

6.6

30.0

11.7

13.7

49.6

17.2

155.1

150.8

Fig. 5 Hourly Generation and Loads

Conclusions
The present paper illustrates the application of the integrated EMCAS-VALORAGUA to model power systems
with hydroelectric generation to handle uncertainties in hydrological conditions and also adjust the hydroelectric
system operation for maximum utilization of intermittent renewable energy resources such as wind.

References
1. P. Thimmapuram, T.D. Veselka, V. Koritarov, S. Vilela, R. Pereira, and R.F. Silva, Modeling Hydro Power
Plants in Deregulated Electricity Markets: Integration and Application of EMCAS and VALORAGUVA, 5th
International Conference on European Electricity Markets 2008, Lisbon, Portugal, May 2008.
2. A. Botterud, M. R. Mahalik, G. Conzelmann, R.F. Silva, S. Vilela, and R. Pereira, Multi-Agent Simulation
of Generation Capacity Expansion Decisions, 5th International Conference on European Electricity Markets
2008, Lisbon, Portugal, May 2008.
3. Julian Bouchard, Audun Botterud, and Prakash Thimmapuram, Price Forecasting and Unit Commitment in
Electricity Markets, 32nd IAEE International Conference, San Francisco, USA, June 2009.
Biographies
Sonia Vilela graduated in Applied Mathematics from the University of Porto, Portugal, and post-graduated in Quantitative
Methods Applied to Management Science, from the Escola de Gesto do Porto, Portugal. She currently works in the Long
Term Planning Directorate of REN. During the past several years, she has been working on the development of mathematical
models for optimization and simulation of hydro-thermal and renewable generating systems.
Helena Azevedo is a civil engineer and joined the electric sector utility in 1982. She has been working at the Generation
Planning Directorate of REN since 1989. During the past several years, she has been mainly engaged in the optimization of
the hydropower plants dimensioning as well as the linked economic evaluation. Presently she is head of Energy Sustainability
Department in the Long Term Planning Directorate of REN.
Maria Natlia Tavares graduated in Applied Mathematics from the University of Porto, Portugal. Presently, she is the
Deputy Director of Long Term Planning Directorate of REN. She has several years of experience in developing and applying
models for electric system planning. She is the principal architect of the VALORAGUA model.
Prakash R. Thimmapuram is a computational scientist in the Center for Energy, Environmental, and Economic Systems
Analysis (CEEESA) at Argonne National Laboratory, Illinois, USA. He received his M.S. in Chemical Engineering from
University of Illinois at Chicago. He has 15 years of experience developing models for energy, environmental and economic
systems analysis. His current research interests include agent based modelling and simulation, and deregulated electricity
markets.
Audun Botterud is an Energy Systems Engineer in CEEESA at Argonne. He has a MSc in Industrial Engineering (1997)
and PhD in Electrical Power Engineering (2003), both from the Norwegian University of Science and Technology (NTNU).
He was previously with SINTEF Energy Research in Trondheim, Norway, and has also spent 1 years at MIT Laboratory
for Energy and the Environment in Cambridge, MA, USA. His research interests include power system planning and
economics, renewable energy systems, wind power integration, stochastic optimization, and agent-based modelling.
Guenter Conzelmann is the Director of the Center for Energy, Environmental, and Economic Systems Analysis at Argonne
National Laboratory. His center provides analytical services to private and government institutions around the world on
strategic energy and environmental issues. In recent years, Mr. Conzelmann has focused his interests on applying complex
systems theories and agent-based modelling approaches to short- and long-term simulations of energy markets, including
restructured power markets and the evolution of a new hydrogen infrastructure. Mr. Conzelmann is also Argonnes program
lead for wind forecasting/integration issues as well as buildings technologies.