Abstract
This paper presents an environmentally constrained economic dispatch algorithm for a hydrothermal system within the framework of a competitive and deregulated electricity market. The optimization problem of a firm in a competitive market is described, the objective function of which can be defined as profit maximization, and we consider that thermal plants are constrained to technical and environmental restrictions. An optimal control technique is applied and Pontryagin's theorem is employed. The proposed algorithm is implemented using the Mathematica© package and is applied to a sample system.