Impact of the future water value on wind-reversible hydro offering strategies in electricity markets

A coordinated offering strategy between a wind farm and a reversible hydro plant can reduce wind power imbalances, improving the system efficiency whilst decreasing the total imbalances. A stochastic mixed integer linear model is proposed to maximize the profit and the future water value FWV of the system using Conditional Value at Risk (CVaR) for risk-hedging. The offer strategies analyzed are: (i) single wind-reversible hydro offer with a physical connection between wind and hydro units to store spare wind energy, and (ii) separate wind and reversible hydro offers without a physical connection between them. The effect of considering the FWV of the reservoirs is studied for several time horizons: one week (168 h) and one month (720 h) using an illustrative case study. Conclusions are duly drawn from the case study to show the impact of FWV in the results.