Electricity market equilibrium analysis for strategic bidding of wind power producer with demand response resource

Abstract

In electricity markets with strategic bidding of wind power producer (WPP), it is an important issue to deal with WPP's imbalance between its actual output and bid output. A joint planning and operation strategy of WPP and demand response (DR) aggregator is capable of reducing the wind power output deviations. In this paper, a multi-period stochastic Cournot equilibrium model of the electricity market is proposed. In this model, the conventional firms and WPP with DR resource both bid in the market and a scenario reduction technique is employed to describe the uncertainty of wind speed. Numerical examples show that with the DR resource, the WPP tends to increase its bid output in the peak time and reduce its bid output in the off-peak time. This will alleviate the price fluctuation in the day-ahead market. In addition, the WPP can bid more output with increasing DR volume, and this will further reduce the peak-time prices.