Multistage Production Decision Model under the Deregulated Electricity Market (For CCGT)

In this paper, we propose a new methodology which is called multi stage production decision model that is suitable for companies with multi business line (gas distribution and Electricity generation) in the deregulated electricity market. We also consider computationally efficient procedures to solve it. Under these conditions, a company, who owns gas for selling in the market and producing electricity, is able to compare between these two markets in order to allocate the optimal quantity of gas for selling in the gas market and using it to produce electricity and sell it in the electricity market. We express the multi stage optimization problem in which the objective is to maximize expected profits and decisions are required to meet the standard operating constraints, under the assumption of competitive market and price taking. The volatility of the spot market price of electricity is represented by a stochastic model based on the pervious study and it is not in the scope of this paper. The mixed integer linear programming is used to solve the optimization problem.