Two-stage distributionally robust strategic offering in pool-based coupled electricity and gas market

Cheng Wang, Ahmed Rabee Sayed, Han Zhang, Xian Zhang, Jianpeng Ren, Qiyue Jia and Tianshu Bi

Energy, 2023, vol. 265, issue C

Abstract: The intensified interactions between power and gas systems and the wide utilization of renewable energy introduce additional challenges in energy marketing and pricing mechanisms. Existing studies either neglect energy uncertainties in deterministic market-clearing models, use predetermined strategic offering prices in single-level models, or approximate gas dynamics in nonrealistic models. This paper proposes a bi-level two-stage distributionally robust electricity–gas market clearing (EG-MC) model considering energy uncertainties and strategic offering prices from energy producers. Strategic energy producers submit their offering prices in the upper-level problem to the EG-MC operator, who maximizes market profits under the realizations of renewable energy outputs while balancing the robustness and conservativeness of the day-ahead market decisions. The presence of gas dynamics in the two stages of the decision-making framework generates an intractable EG-MC problem. A novel triple-loop procedure, namely inner and outer columns & constraints generation and bilinear approximation algorithms, is proposed to sufficiently solve the formulated model. Finally, numerical analyses on an EG-MC model demonstrate the effectiveness of the distributionally robust strategic offers and the performances of the solution methodology.

Keywords: Energy market; Natural gas dynamics; Distributionally robust optimization; C&CG algorithm; Wind generation uncertainty (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:265:y:2023:i:c:s0360544222031747

DOI: 10.1016/j.energy.2022.126288

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