Impacts of Strategic Bidding of Wind Power Producers on Electricity Markets

In this paper, the impacts of strategic bidding of a wind power producer on electricity markets are studied. To this end, the strategic bidding of a wind power producer is investigated under the following three schemes: 1) the wind power producer sets its generation power while other producers set their supply functions, 2) the wind power producer sets its supply function and so do other producers, and 3) the wind power producer teams up with a non-wind generating firm and the aggregated firm sets its supply function and so do other producers. Supply function equilibrium models are used to determine the strategic behavior of generating firms at market equilibrium. Illustrative numerical results are provided.