On the Market Equilibria with Renewable Power Producers in Power Networks

Imagine you are facing a two-settlement market, meaning that the markets are coupled together. Your strategy as a stochastic renewable power producer (RPP) is to bid (promise) for delivering power in the second market, but you have to submit it in the first market! That is the situation the RPPs face in todays energy markets around the world. Now, to add to this, the system operators ask the RPPs to submit strict curves that is very difficult to reflect their probabilistic profile.

Here we propose a simple solution to this that ensures the optimality of the behavior of the RPPs as we give a computationally traceable algorithm for finding the Nash equilibrium in this complicated problem. Furthermore, the system operator is also happy because the proposed approach is simple to implement for it as well.

To see the pdf of the paper, see link.