Portfolio optimization for natural gas combined cycle power plants

The Energy industry in Turkey is becoming an important and attractive industry. Market liberalization movements starting from 2001, competition in energy markets, economical and industrial development, increasing energy demand as a consequence of fast urbanization and the need for new power plant investments play the main role on its attractiveness. Among different types of power generation facilities, natural gas power plants (NGPP) get considerable attention because of the advantages of being able to generate on demand and location flexibility. At the same time, due to the fact that natural gas, the main input for energy production, is a costly imported good, managing the energy production with unsteady electricity prices in a free market becomes an a complex operation research problem for the producers. The producers, often operating several generators, need to make simultaneous planning for their entire plant portfolio to maximize their profit based on the information coming from the market and equipment characteristics. For this purpose, in this study for the NGPP, a model is developed for producers to plan generation for a certain horizon considering operation costs and forecasted market data. With this model, the companies' plant capacities can be used efectively and also reaction to the hourly market variations become quicker and be based on analitical methods.