Optimal Bidding Strategy for a Power Producer Under Monthly Pre-Listing Balancing Mechanism in Actual Sequential Energy Dual-Market in China

Abstract

At present, electricity transaction in China is mainly conducted by medium-and long-term market contracts, while the spot electricity market has not yet been implemented. An appropriate energy imbalance processing mechanism for medium-and long-term power transactions is highly demanded for maintaining the stability of market operation, since it is supposed to guide market participants to reduce system imbalances and actively provide balancing services. Given this background, a bi-level optimization model for developing optimal bidding strategies of power producer in the monthly sequential contract and balancing markets is proposed based on the currently implemented monthly pre-listing balancing mechanism in China. In the upper level of the model, the monthly utility which makes a tradeoff between revenues and risks produced by the bidding strategy of the producer in the monthly sequential energy dual-market is maximized, considering the uncertainties of the monthly energy imbalances in the power system and the bidding strategies of rivals. In the lower level, the dispatch cost is minimized by simulating the three-stage process of sequential system operation, which includes contract market clearing by power exchange (PX), energy decomposition and modification by the system operator (SO) and balancing market clearing by PX. The simulation results of an eastern provincial electricity market in China show that the presented model can assist power producers in adjusting their monthly bidding strategies with relevant factors, such as the minimum output level of each producer, risk preference, and forecast information including system energy imbalance status and bidding strategies of rivals. In addition, the proposed method is also helpful for market designers in setting market parameters, such as government-authorized contract energy proportion and settlement thresholds in the balancing market.INDEX TERMS Bidding strategy, medium-and long-term market, imbalance processing mechanism, balancing market, monthly pre-listing balancing mechanism.

Optimal Bidding of Price-Maker Retailers With Demand Price Quota Curves Under Price Uncertainty

“…The PROFIT is supposed to be calculated by subtracting the purchasing costs in the wholesale market from the expected revenues with the end-users, as shown by (12).…”

“…A pricemaker refers to a facility, which is large enough that its action can alter market prices. Price-maker strategies are initially studied for generators, such as thermal generators [3][4][5][6][7][8][9][10][11][12], hydro generators [13], wind power [14], energy storage [15][16][17], and then applied to the demand side [18,19].…”

“…MPEC approach often imposes a high computational burden due to its complicated mathematical formulation, which makes it challenging to solve for large-scale systems [22]. Focus on the monthly energy market in China, [12] presents a bi-level optimization model for developing optimal bidding strategies of power producer in the monthly sequential contract and balancing markets.…”

“…China has witnessed a profound revolution in the electricity market, and the yearly and monthly energy markets have been implemented in recent four years. Since the new round of power industry reform in 2015, the trading electricity volume in China has constantly been increasing [12]. In the first half of 2019, the total traded electrical energy reached over 884.7 TWh, experiencing an annual growth of 40% [23].…”

Equilibrium Stability of Asymmetric Evolutionary Games of Multi-Agent Systems With Multiple Groups in Open Electricity Market

“…Furthermore, the opening degree of the open electricity power market is continuously improving [9], [10]. The reasonable market mechanism can play a positive role in the development of the competitive power market [11], which is conducive to guiding market participants to make correct decisions and maintaining the stability of market operation [12]. A huge challenge that is how to find the equilibrium state to balance the interests of all parties in an open electricity market under the new situation.…”