Competitive Behavior of Hydroelectric Power Plants under Uncertainty in Spot Market

This article aims to analyze agents' behavior in a competitive hydrothermal energy market. The idea is to investigate how much the day-to-day behavior of the market can be different from the predictions presented by cost-based models because of the risk perception of each agent (hydroelectric energy producer, in this case) as a participant of the market. The main contribution is in determining the impact on the agents' revenue in the short-term market due to the variation in the amount of energy generated and the market price, which other methodologies may not be able to capture. For this reason, a case study was made using daily simulations in a given month, observing the strategy and bids of eight hydroelectric agents for a central market operator emulated by an energy price offer simulator called SOPEE. The study reflected qualitative and quantitative examples of how the risk perception and the behavior of each agent can influence market behavior due to the variation in their perceptions of the parameters that form the energy price.

Automated summary

This article analyzes agents' behavior in a competitive hydrothermal energy market, focusing on the difference between market behavior and cost-based model predictions, as well as the impact of agents' risk perception on market revenue. A case study using daily simulations of eight hydroelectric agents' strategies and bids in a central market operator was conducted to demonstrate the qualitative and quantitative examples of how risk perception and agent behavior can influence market behavior.