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Strategic bidding by a risk-averse firm with a portfolio of renewable resources
KTH, School of Electrical Engineering (EES), Electric power and energy systems. (Electricity Market Research Group)
KTH, School of Electrical Engineering (EES), Electric power and energy systems. (Electricity Market Research Group)
2015 (English)In: 2015 IEEE Eindhoven PowerTech, PowerTech 2015, IEEE conference proceedings, 2015Conference paper (Refereed)Text
Abstract [en]

The possibility of market power abuse in the systems with a high amount of flexible power sources (hydro units and energy storage) is believed to be very low. However, in practice strategic owners of these resources may limit the ramping rate whenever the price spikes occur. This is particularly relevant for the power systems with a high penetration of wind power, due to the high levels of uncertainty. In this paper we propose a bilevel game-theoretic model to investigate the effect of this type of strategic bidding. The lower-level is a security-constrained economic dispatch carried out by the system operator. The upper-level is a profit-maximization problem solved by a risk-averse company owning a varied portfolio of energy sources: energy storage, hydro power units, wind generators, as well as traditional generators. We represent the uncertainty affecting the decision making by introducing a set of wind power scenarios and variable competitors' price bids. The resulting mathematical problem with equilibrium constraints (MPEC) is recast as a single-stage mixed-integer linear program (MILP) and solved with CPLEX. In the case study we demonstrate the effect of withholding the ramp-rate on the social welfare.

Place, publisher, year, edition, pages
IEEE conference proceedings, 2015.
Keyword [en]
Decision making, Energy storage, Game theory, Hydroelectric generators, Integer programming, Risk analysis, Scheduling, Wind power, Bilevel game-theoretic models, Equilibrium constraint, Mathematical problems, Mixed integer linear program, Profit maximization, Renewable resource, Security-constrained economic dispatch, Wind generator systems, Electric load dispatching
National Category
Energy Engineering
URN: urn:nbn:se:kth:diva-181163DOI: 10.1109/PTC.2015.7232550ScopusID: 2-s2.0-84951325508ISBN: 9781479976935OAI: diva2:902304
IEEE Eindhoven PowerTech, PowerTech 2015, 29 June 2015 through 2 July 2015

QC 20160210

Available from: 2016-02-10 Created: 2016-01-29 Last updated: 2016-02-10Bibliographically approved

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Moiseeva, EkaterinaHesamzadeh, Mohammad Reza
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