Trading wind generation from short-term probabilistic forecasts of wind power

Publication: Research - peer-reviewJournal article – Annual report year: 2007

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Due to the fluctuating nature of the wind resource, a wind power producer participating in a liberalized electricity market is subject to penalties related to regulation costs. Accurate forecasts of wind generation are therefore paramount for reducing such penalties and thus maximizing revenue. Despite the fact that increasing accuracy in spot forecasts may reduce penalties, this paper shows that, if such forecasts are accompanied with information on their uncertainty, i.e., in the form of predictive distributions, then this can be the basis for defining advanced strategies for market participation. Such strategies permit to further increase revenues and thus enhance competitiveness of wind generation compared to other forms of dispatchable generation. This paper formulates a general methodology for deriving optimal bidding strategies based on probabilistic forecasts of wind generation, as well as on modeling of the sensitivity a wind power producer may have to regulation costs. The benefits resulting from the application of these strategies are clearly demonstrated on the test case of the participation of a multi-MW wind farm in the Dutch electricity market over a year.
Original languageEnglish
JournalI E E E Transactions on Power Systems
Publication date2007
Volume22
Issue3
Pages1148-1156
ISSN0885-8950
DOIs
StatePublished

Bibliographical note

Copyright: 2007 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE

CitationsWeb of Science® Times Cited: 122

Keywords

  • wind energy, forecasting, decision-making, energy markets, uncertainty
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