Abstract
Under the environmental crisis of global warming, more efforts are put in application of low carbon energy, especially low-carbon electricity. Development of wind generation is one potential solution to provide low-carbon electricity source. This paper researches operation of wind generation in a de-regulated power market. It develops bidding models under two schemes for variable wind generation to analyze the competition among generation companies (GENCOs) considering transmission constraints. The proposed method employs the supply function equilibrium (SFE) for modeling the bidding strategy of GENCOs. The bidding process is solved as a bi-level optimization problem. In the upper level, the profit of an individual GENCO is maximized; while in the lower level, the market clearing process of the independent system operator (ISO) is modeled to minimize the production cost. An intelligent search based on genetic algorithm and Monte Carlo simulation (MCS) is applied to obtain the solution. The PJM five-bus system and the IEEE 118-bus system are used for numerical studies. The results show when wind GENCOs play as strategic bidders to set the price, they can make significant profit uplifts as opposed to playing as a price taker, because the profit gain will outweigh the cost to cover wind uncertainty and reliability issues. However, this may result in an increase in total production cost and the profit of other units, which means consumers need to pay more. Thus, it is necessary to update the existing market architecture and structure considering these pros and cons in order to maintain a healthy competitive market.
Highlights
For almost half century, global warming is always one of many top challenges to human beings all over the world. many efforts have been made to in order to avoid disasters resulting from global warming, such as polar iceberg melting, sea level increasing, coast area recession, environment deterioration and extremely abnormal climate etc
The contribution of this paper can be summarized as follows: 1) Two bidding strategy schemes are modeled in this paper to consider wind generation companies (GENCOs), conventional GENCOs, and transmission constraints, while few literatures has studied the impact of wind GENCOs to bidding strategy
The first scheme considers wind power as negative loads, which is aligned with the ongoing practice that wind generation must be dispatched with higher priority
Summary
Global warming is always one of many top challenges to human beings all over the world. many efforts have been made to in order to avoid disasters resulting from global warming, such as polar iceberg melting, sea level increasing, coast area recession, environment deterioration and extremely abnormal climate etc. In [9], a probability based Monte Carlo (MC) method is proposed to solve competitive generator game with imperfect information, but without transmission constraints. Two types of bid scenarios are proposed as linear bid and block bid trading for wind power generation, but the model did not consider transmission constraints and competition with other types of generators. In [22, 23], a trading strategy is given for wind power producers to minimize their imbalance cost in short-term, but the transmission constraints as well as competition with other types of generators are not considered. In [24], the uncertainty of wind power generation was modeled in constraints of an optimization problem instead of in the objective function.
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