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Optimal strategic offerings for a conventional producer in jointly cleared energy and balancing markets under high penetration of wind power production

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  • Tsimopoulos, Evangelos G.
  • Georgiadis, Michael C.

Abstract

This work, based on Stackelberg hypothesis, considers a conventional power producer exercising their dominant position in an electricity pool with high penetration of wind power production. A bi-level optimization model is used to provide optimal offer strategies for the aforementioned producer in a jointly cleared energy and reserve pool settled through an hourly auction process. The upper-level problem illustrates the expected profit optimization of the strategic producer while the lower-level problem represents the energy-only market clearing process through a two-stage stochastic program. The first stage clears the day ahead market, and the second stage presents the system operation in balancing time though a set of plausible wind power production realizations. The bi-level problem is recast into a mathematical program with equilibrium constraints which is then reformulated into a mixed integer linear program. These transformations occur using the Karush-Kuhn-Tucker optimality conditions and the strong duality theory. The suggested model provides optimal strategic offers and local marginal prices under different levels of wind penetration and network line transmission capacities.

Suggested Citation

  • Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2019. "Optimal strategic offerings for a conventional producer in jointly cleared energy and balancing markets under high penetration of wind power production," Applied Energy, Elsevier, vol. 244(C), pages 16-35.
    • Handle: RePEc:eee:appene:v:244:y:2019:i:c:p:16-35
    DOI: 10.1016/j.apenergy.2019.03.161
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    Citations

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    Cited by:

    1. Christos N. Dimitriadis & Evangelos G. Tsimopoulos & Michael C. Georgiadis, 2021. "A Review on the Complementarity Modelling in Competitive Electricity Markets," Energies, MDPI, vol. 14(21), pages 1-27, November.
    2. Dimitriadis, Christos N. & Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2022. "Strategic bidding of an energy storage agent in a joint energy and reserve market under stochastic generation," Energy, Elsevier, vol. 242(C).
    3. Dimitriadis, Christos N. & Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2023. "Optimal bidding strategy of a gas-fired power plant in interdependent low-carbon electricity and natural gas markets," Energy, Elsevier, vol. 277(C).
    4. Yang, Peiwen & Dong, Jun & Lin, Jin & Liu, Yao & Fang, Debin, 2021. "Analysis of offering behavior of generation-side integrated energy aggregator in electricity market:A Bayesian evolutionary approach," Energy, Elsevier, vol. 228(C).
    5. Huang, Yi & Gordon, Dan & Scott, Paul, 2023. "Receding horizon dispatch of multi-period look-ahead market for energy storage integration," Applied Energy, Elsevier, vol. 352(C).
    6. Wang, Bohong & Guo, Qinglai & Yu, Yang, 2022. "Mechanism design for data sharing: An electricity retail perspective," Applied Energy, Elsevier, vol. 314(C).
    7. Liu, Shiyu & Ren, Yanzhe & Zhang, Zhenyu & Xiao, Yao & Bie, Zhaohong & Wang, Xifan, 2021. "Optimal bid-offer strategy for a virtual energy storage merchant: A stochastic bi-level model with all-scenario feasibility," Applied Energy, Elsevier, vol. 299(C).
    8. Dranka, Géremi Gilson & Ferreira, Paula & Vaz, A. Ismael F., 2021. "A review of co-optimization approaches for operational and planning problems in the energy sector," Applied Energy, Elsevier, vol. 304(C).
    9. Xiao, Xiangsheng & Wang, JianXiao & Hill, David J., 2022. "Impact of Large-scale concentrated solar power on energy and auxiliary markets," Applied Energy, Elsevier, vol. 318(C).
    10. Hong, Qiuyi & Meng, Fanlin & Liu, Jian & Bo, Rui, 2023. "A bilevel game-theoretic decision-making framework for strategic retailers in both local and wholesale electricity markets," Applied Energy, Elsevier, vol. 330(PA).
    11. Xiao, Xiangsheng & Wang, Jianxiao & Lin, Rui & Hill, David J. & Kang, Chongqing, 2020. "Large-scale aggregation of prosumers toward strategic bidding in joint energy and regulation markets," Applied Energy, Elsevier, vol. 271(C).
    12. Hosseini, Seyyed Ahmad & Toubeau, Jean-François & De Grève, Zacharie & Vallée, François, 2020. "An advanced day-ahead bidding strategy for wind power producers considering confidence level on the real-time reserve provision," Applied Energy, Elsevier, vol. 280(C).
    13. Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2021. "Nash equilibria in electricity pool markets with large-scale wind power integration," Energy, Elsevier, vol. 228(C).
    14. Lan, Liuhan & Zhang, Xingping & Zhang, Youzhong, 2023. "Low carbon and efficiency oriented day-ahead joint electrical energy and ancillary services market clearing model for generation-side in China," Energy Economics, Elsevier, vol. 121(C).
    15. Li, Qirui & Yang, Zhifang & Yu, Juan & Li, Wenyuan, 2023. "Impacts of previous revenues on bidding strategies in electricity market: A quantitative analysis," Applied Energy, Elsevier, vol. 345(C).
    16. Khaloie, Hooman & Abdollahi, Amir & Shafie-khah, Miadreza & Anvari-Moghaddam, Amjad & Nojavan, Sayyad & Siano, Pierluigi & Catalão, João P.S., 2020. "Coordinated wind-thermal-energy storage offering strategy in energy and spinning reserve markets using a multi-stage model," Applied Energy, Elsevier, vol. 259(C).

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