Offer strategy for a wind power producer in day-ahead market

Abstract

Energy conversion from renewable energy has been possible due to extra-market supporting policies. The extramarket approach survives for low penetration levels, but as energy from wind penetration increases the extra-market policies are expected to become untenable. A wind power producer (WPP) should expect full competition in deregulated electricity market, i.e., has to have an offer strategy to be competitive. A WPP has to face uncertainties on available wind energy and market prices. Uncertainties have to be conveniently addressed; otherwise a decrease on the financial results is expected. A stochastic programming approach is presented to suitable address those uncertainties. The problem formulation is approached in the way of writing equations in order to benefit from the well-established mixed integer linear program (MILP) solvers in order to compute an offering strategy. A case study with data from the Iberian Electricity Market is used to illustrate the effectiveness of the proposed approach.