Abstract
This paper presents an optimal bidding strategy for a strategic wind power producer (WPP) in a distribution-level energy market (DLEM). The behavior of the WPP is modelled through a bi-level stochastic optimization problem where the upper-level problem maximizes the profit of the WPP and the lower-level problem describes the clearing processes of the DLEM while considering network constraints. The bi-level problem is a stochastic mathematical program with equilibrium constraints (MPEC) that is formulated as a mixed-integer linear programming (MILP) problem. The main focus of this study is investigating prosumers’ impact on the market power of the strategic WPP in a DLEM structure. In this model, the effect of flexible prosumers from the aspects of demand response (DR) participants and photovoltaic penetration level (PVPL) on the WPP’s offering strategy is investigated. Moreover, the impact of bilateral contract on the market power of the strategic WPP and the cleared prices of the network is addressed. The proposed model is implemented in an IEEE 33-bus and numerical results illustrate how behavior of flexible prosumers and PVPL index affect the decision making of the strategic WPP when network constraints are considered. Numerical results show that by active participation of prosumers in DR programs, the reliance of DLEM on the strategic WPP reduces. Moreover, if the WPP participates in bilateral contracts, its offering to the DELM decreases, and as the result, the cleared prices augment indicating market power of the WPP.
Highlights
INTRODUCTION a BACKGROUND AND MOTIVATIONThe environmental concerns, the fossil fuel crisis, and subsidies for wind power generation have significantly yielded to the development of wind energy in many electricity systems throughout the world [1]
The problem of the optimal offering of the strategic wind power producer (WPP) with market power is modeled via a stochastic bi-level framework as below: a: BI-LEVEL MODEL FORMULATION The obtained bi-level model is recast as a single level mathematical program with equilibrium constraints (MPEC) by replacing the lower level by its KKT optimality constraints to derive the strategic WPP’s optimal strategy when participates in distribution-level energy market (DLEM)
WORK In this paper, a bi-level stochastic framework was presented for determining the optimal strategy of a WPP as a price- maker in DLEM
Summary
To develop a market-based DR model for the prosumers’ responses in DLEM, it is assumed that the prosumers bid their load mitigation the same as DGs that offer their power production In this base, DR cost is the product of the DR price and DR bidding quantity. C: UNCERTAINTIES CHARACTERIZATION In the proposed stochastic model, a major set of uncertainties including uncertainty of WPP’s power production, PV generation, price and quantity bidding of loads and regulating market prices are considered. These uncertain parameters are forecasted in advance at each hour that their forecast errors are modelled by proper probability distribution functions (PDFs) [22]. The verification of the correctness of the algorithms and systems will be conducted using the methods and tools described in [26] and [27]
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