Flexible Stochastic Bilevel Scheduling Strategy in Hydropower Dominated Energy Markets

This paper presents an electricity market that in-cludes day-ahead energy and manual frequency replacement reserve (mFRR) markets and consists of cascaded hydropower plants (HPs) offering their aggregated capacity to these markets. The proposed model is a two-stage bilevel offering strategy to show the hierarchical decision-making process in the European electricity market. The upper-level describes the day-ahead profit maximization optimization considering the opportunity cost of saving water which is controlled through the real-time dispatch in the operation day and mFRR capacity requirements imposed from TSO. In the lower-level, the mFRR energy market with their corresponding active-time duration is modeled to control the real-time discharge of water and upward or downward offering strategies. The new approach provides the flexibility for the planning and operational stages to define their own objective functions, maximize their profits and conserve the proper interaction between them through linking variables.