ABSTRACT
This chapter explores the opportunities available for wind power producers (WPP) if they can purchase or schedule some reserves to offset part of their deviation rather than being fully penalized in the real-time market. It focuses on the wind power optimal bidding strategy under the circumstances that a WPP commits some of its own reserves to offset its deviations, instead of entirely being penalized in the ex-post imbalance market. The chapter presents a general model that considers a WPP is able to purchase reserve and bid energy in the day-ahead market. As the integration of renewable energy increases, operating costs are suggested to be paid by the WPPs. In the PJM power market, a WPP sells energy through a two-settlement electricity market, in the same manner as conventional units. The WPP’s revenue loss associated with the uncertainty of wind power can be mitigated through strategically bidding in the market.
