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

Francisco Javier Eransus
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Francisco Javier Eransus: Instituto Complutense de Análisis Económico (ICAE) – Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid

No 2016-13, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

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%.

Keywords: Power markets; Renewable energy; Uncertainty; Optimal bidding; Forecasting. (search for similar items in EconPapers)
JEL-codes: C22 C44 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2016-02
New Economics Papers: this item is included in nep-ene and nep-reg
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