Optimal response of a hydroelectric power plant with bilateral contracts

Deregulation and liberalization of electric power industry, among other things, has created new requirements for the market participants. The power system engineer, operator, and, in general, the market participant is being faced with requirements for which he does not have adequate training and the proper software tools. In this framework, among others, a pure hydro-generation company has to operate its hydro units, throughout the operating day, trying to fulfill the market clearing schedule or a bilateral contract. This paper addresses the optimal response of a hydroelectric power plant with bilateral contracts in order to maximize its profit from selling energy.