Optimal day-ahead bidding for a Norwegian hydropower producer

This paper presents a multistage stochastic MIP-model developed for day-ahead market bidding and short term scheduling of a Norwegian hydro power generator. In order to capture the long-term aspects of depleting reservoirs the model uses an hourly resolution the first day, and a gradually coarser resolution toward the end of the planning horizon, which stretches about six months ahead. Electricity prices are stochastic, whereas inflow is deterministic as the model is intended for use in the winter season. The model is tested on a power plant in Southern Norway and is found to give reasonable results and to be able to mimic the real world bidding strategy of the plant owner fairly well.