ABSTRACT
The classic unit commitment problem consists of establishing, for each period of the planning horizon, the start-up and shutdown for each power unit of a power system. The hydroelectric generation unit commitment problem is explicitly addressed in our research as it is considered an important component to optimize the operation and to evaluate the technical efficiency of a hydroelectric generation company. Competition creates new markets where buyers and sellers can conduct electricity trade by auctions in the energy pool or by bilateral contracts. Thermal bidding strategies that maximize the expected net incomes can show that the optimal strategy is to offer at prices reflecting the variable operating costs of the thermal plant as these variable costs are a function of the fuel costs. A hydroelectric generating unit has a complex operational performance. Its power output depends mainly on three variables: the net head, the water discharge to the turbine, and the turbine-generator set efficiency.
