Risk-averse Offer Strategy of a Photovoltaic Solar Power Plant with Virtual Bidding in Electricity Markets

Photovoltaic (PV) solar power is a kind of renewable energy source that is developing rapidly in modern power systems. PV solar power producers need to generate efficient trading strategies to participate in the competitive electricity markets. In this paper, a kind of pure financial instrument called virtual bidding, which is available in the U.S. electricity markets, is used to help PV solar power producers improve profits and manage risk. A stochastic optimization model is established to co-optimize the profits of solar power offering and virtual bidding, where seasonal autoregressive integrated moving average (SARIMA) model is used for scenario generation and Conditional Value at Risk (CVaR) is used as risk measure. The proposed model is a mixed integer linear programming (MILP) problem which can be solved by existing commercial solvers to obtain the stepwise curves for solar power offering and virtual bidding simultaneously. Finally, case studies are carried out for a 62 MW distributed PV solar power plant to verify the effectiveness of the proposed model and analyze the impact of virtual bidding on the profitability and risk management of the PV solar power producer.