Combined Wind and Solar Power Offering Strategy with Virtual Bidding and Risk Management in Two-Settlement Electricity Markets

Abstract

This paper presents a stochastic-optimization-based decision-making model to generate the optional bidding strategies for wind and solar energy facilities with virtual bidding and risk management in two-settlement electricity markets. The proposed model generates day-ahead optimal bidding curves while considering the balancing actions in the real-time market. The uncertainties related to wind and solar power productions and day-ahead and real-time market locational marginal prices are modeled by using a prediction-based scenario generation method. Case studies are performed for an electric utility participating in the Southwest Power Pool electricity market to demonstrate the effectiveness of the proposed model for different risk aversion levels.