Profit-Sharing Mechanism for Aggregation of Wind Farms and Concentrating Solar Power

Abstract

Concentrating solar power (CSP) has been advocated as a promising technology to mitigate the uncertainty in variable renewables generation due to its thermal storage capability. In deregulated markets, however, it remains an open question as to how to identify different CSP plants’ contributions to uncertainty mitigation, and incentivize their participation in joint offering with variable renewable generation. In this article, we propose a profit-sharing mechanism to incentivize the joint offering of CSP and wind power aggregation. The joint offering strategy is formulated as a two-stage stochastic optimization model, aimed at maximizing the day-ahead market revenues, considering real-time imbalance settlement. A Nash bargaining (NB)-based market mechanism is designed to allocate the surplus from the joint offering. In contrast to symmetric NB with equal bargaining power (BP), we develop a novel BP evaluation method by precisely quantifying the market contributions of different producers in the joint offering. To preserve the autonomy of each producer, a decentralized solution framework is presented. Case studies show that the joint offering of wind power and CSP aggregation can effectively mitigate real-time imbalance. The proposed profit-sharing mechanism can identify market participants’ contributions in both the day-ahead and balancing markets.