Optimal Offering Strategies for Wind Power in Energy and Primary Reserve Markets

Wind power generation is to play an important role
in supplying electric power demand, and will certainly impact
the design of future energy and reserve markets. Operators of
wind power plants will consequently develop adequate offering
strategies, accounting for the market rules and the operational
capabilities of the turbines, e.g., to participate in primary reserve
markets. We consider two different offering strategies for joint
participation of wind power in energy and primary reserve markets,
based on the idea of proportional and constant splitting of
potentially available power generation from the turbines. These
offering strategies aim at maximizing expected revenues from both
market floors using probabilistic forecasts for wind power generation,
complemented with estimated regulation costs and penalties
for failing to provide primary reserve. A set of numerical examples,
as well as a case-study based on real-world data, allows
illustrating and discussing the properties of these offering strategies.
An important conclusion is that, even though technically
possible, it may not always make sense for wind power to aim at
providing system services in a market environment.