Strategic Offering for a Wind Power Producer

As a result of subsidies and technological maturity, renewable electricity producers have grown in some jurisdictions to clearly dominant positions in the market. Under this context, we propose an offering strategy for a wind power producer with market power that participates in the day-ahead market as a price-maker, and in the balancing market as a deviator. Uncertainty pertaining to wind power production and balancing market price is represented through a set of correlated scenarios. The proposed model is a stochastic mathematical program with equilibrium constraints (MPEC) that can be recast as a tractable mixed-integer linear programming (MILP) problem, which is solvable using available optimization software. Results from an illustrative example and two case studies show the effectiveness of the proposed model.