Strategic Biddings of a Consumer demand in both DA and Balancing Markets in Response to Renewable Energy Integration

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Abstract

This paper proposes strategic biddings for a consumer demand that participates in both the day-ahead and balancing markets. The strategic behavior of the consumer is represented by the bilevel optimization programming with minimization of consumer costs at the upper level (UL) subject to the co-optimization of energy and reserve in the market clearing process at the lower level problem (LL). Using the Karush-Kuhn-Tucker (KKT) optimality constraints to replace the LL problem, the bilevel model is recast into a single-level mathematical program with equilibrium constraints (MPEC). The resulted model is finally formulated as a mixed-integer linear programming (MILP) problem using the exact linearization technique and Fortuny-Amat transformation to replace bilinear terms and the complementarity constraints, respectively. The results demonstrate a reduction in the electricity consumption payment for the strategic consumer and a decline in social welfare. © 2017 Elsevier Inc. All rights reserved.
Original languageEnglish
Article number108132
Number of pages15
JournalElectric Power Systems Research
Volume210
Early online date28 May 2022
DOIs
Publication statusPublished - 2022
MoE publication typeA1 Journal article-refereed

Keywords

  • Bilevel programming
  • electricity market
  • mathematical program with equilibrium constraints (MPEC)
  • renewable energy generation
  • strategic bidding

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