A game-theoretic analysis of wind power generator bidding strategies in electricity markets

Abstract

In this paper, we investigate optimal wind power generator (WPG) bidding strategies in electricity markets. Assuming the cost of wind power generation is zero, WPG would maximize its profit by determining the optimal amount of wind power to bid in the day-ahead market (DAM). Significant wind penetration is considered in our problems such that WPG's actions will affect energy prices. In addition, the existence of WPG's optimal bidding strategies in both cooperative games and non-cooperative games is shown. The proposed stochastic optimization models consist of the DA energy market clearing, the real-time (RT) energy market clearing, and WPG's profit maximization. The models also take into account the uncertainty of wind power production. The models have been tested on a system with 10 conventional generators and 2 wind power generators. The effect of wind power forecast errors is also discussed.