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A bidding strategy for minimizing the imbalances costs for renewable generators in Spanish power markets

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Eransus, Francisco Javier (2016) A bidding strategy for minimizing the imbalances costs for renewable generators in Spanish power markets. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 13, 2016, ISSN: 2341-2356 ]

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Abstract

The aim of this paper is to suggest a simple methodology to be used by renewable power generators to bid in Spanish markets in order to minimize the cost of their imbalances. As it is known, the optimal bid depends on the probability distribution function of the energy to produce, of the probability distribution function of the future system imbalance and of its expected cost. We assume simple methods for estimating any of these parameters and, using actual data of 2014, we test the potential economic benefit for a wind generator from using our optimal bid instead of just the expected power generation. We find evidence that Spanish wind generators savings would be from 7% to 26%.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Power markets, Renewable energy, Uncertainty, Optimal bidding, Forecasting.
Subjects:Sciences > Statistics > Sampling (Statistics)
Sciences > Statistics > System theory
JEL:C22, C44
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2016
Number:13
ID Code:39134
Deposited On:22 Sep 2016 08:12
Last Modified:22 Sep 2016 08:12

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