Abstract: This article evaluates the optimum economic hourly dispatch in hydro-thermal systems with massive integration of variable renewable energy, wind and solar. A linear optimization model, Elemod, makes it feasible to analyze the power system operation with hourly time step, taking into account one year of planning horizon much larger than the weekly horizon that usually sets the hydro-thermal scheduling studies. We propose an alternative formulation for pumped-hydro storage, in a way that the total annual system cost is minimized with the co-optimization of the hourly PHS operation cost.

To illustrate the methodology and modelling application, presenting a real system analysis, the Brazilian Hydro-thermal System was chosen to be simulated based on its planned capacity stepping into 2029. At the end, the paper shows the ability of the PHS system to provide hourly capacity to the power system, as well as to better allocate VRE generation and manage the bulk of transmission system usage. The cost reduction could be about 14 Million R$ of the total operation cost estimated for the 2029-power system capacity.