Long-Term Bidding Scheduling of a Price-Maker Cascade Hydropower Station Based on Supply Function Equilibrium

How cascade hydropower stations (CHSs) play the electricity market game is regarded as an important issue. The majority of the work to date has focused on short-term horizons and several simplifications in the hydropower system. If future prices are expected to be higher than the current price, CHSs with large reservoirs allow the bidder to postpone energy production for a longer time scale, such as several months or more, which generally matches with the regulation period of the reservoir. Rejecting the assumption of simplifying the hydropower system (ASHS), the long-term bidding strategy of CHSs is discussed for a price-maker based on the supply function equilibrium (SFE). This study considers multiple price-makers, time-coupling, and the characteristics of the hydropower system, with significant challenges. The difference from the conventional model is that the long-term optimal scheduling model of CHSs is added. Moreover, a new methodology is proposed, the equilibrium curve of the uniform clearing price (UCP) is introduced, and the Nash equilibrium solutions are solved based on the nonlinear complementarity approach. In a simulated electricity market, the result can validate the feasibility of the model and adopted methodology and the rationality of the results by taking certain CHSs with multireservoir as an example. The negative influence of ASHS is analyzed, which shows that the characteristics of the hydropower system should be fully considered in the long-term bidding research. Future study aspects are also considered, which are presented as the key issues such as market assumptions and randomness.