Optimal offering strategy for wind power in day-ahead market

Specialeforsvar ved Anders Møller Jacobsen

Titel: Optimal offering strategy for wind power in day-ahead market

Abstract: Due to the development in wind energy, wind power producers play an important role in supplying electricity. In order for the wind power operators to optimize their production, they keep developing new offering strategies in the spot market, accounting for several uncertainties.
In this thesis we develop a bidding strategy for wind producers taking the uncertainty of realized wind power production and the cost associated into account. We set up a stochastic two-stage equilibrium model with wind producers and conventional producers.
As a benchmark for the equlibrium model, we develop the central planner’s model with the objective of maximizing social welfare.
In addition, we extended both the equilibrium model and the central planner model with the regulating market. We use the models to investigate the wind producer’s ability to exercise market power in the day-ahead market, based on real-world wind production data. By assuming perfect information with no uncertainty attached to the spot price and regulating price, the thesis finds that the wind producer’s offering strategy mainly depends of the up- and down- regulation price. If the up-regulation price is equivalent to the spot price, the wind producer generates negative imbalance which is the most profitable. On the other hand, if the down-regulation price is equivalent to the spot price, the wind producer generates positive imbalance which is also profitable.

Vejleder: Trine Krogh Boomsma
Censor:     Oli Madsen, DTU