ABSTRACT
With the increasing penetration level of renewable wind power participating in the electricity market, the uncertainty of the system supply is increased. The main uncertainty is the wind forecast error, hence increasing the uncertainty of wind generation. This uncertainty could reduce system stability, requiring an extra cost to maintain system stability. A better profit could be achieved by reducing the uncertainty. This article discusses different methods to reduce the uncertainty, such as feed-in-tariff, improved forecast accuracy, energy storage, and aggregating renewable wind generation. To aggregate renewable wind power generation, a two-settlement contract is applied to the day-ahead market. The two-settlement contract not only allows renewable wind power generators (RWPGs) to offer firm trade electricity power one day ahead, but also allows RWPGs to trade uncertain and risky next-day electricity power with each other. From our results, the two-settlement risky contract could significantly increase the profit of RWPGs. The average increases in profit is about 9%.
