Optimization of Thermal Power Plants Operation in the German De-Regulated Electricity Market Using Dynamic Programming

Abstract

The prospect of clean electrical energy generation has recently driven to massive investments on renewable energies, which in turn has affected operation and profits of existing traditional thermal power plants. In this work several coal-fired and combined cycle power units are simulated under design and off-design conditions to adequately represent the behavior of all modern thermal units included in the German power system. A dynamic optimization problem is then solved to estimate the short-run profits obtained by these units using the spot prices of the German electricity market (EEX) in years 2007–2010. The optimization model is developed using a Mixed Integer Linear Programming approach to take the on-off status into account and reduce computational effort. New market scenarios with increasing renewable shares (and consequently different spot prices) are finally simulated to analyze the consequences of a larger capacity of renewable energies on the optimal operation of traditional thermal power plants.