Short-term strategies for Dutch wind power producers to reduce imbalance costs

• Published in: Energy policy 2013-01, Vol.52, p.573-582
• Main Authors: Chaves-Ávila, José Pablo, Hakvoort, Rudi A., Ramos, Andrés
• Format: Article
• Language: English
• Subjects: Applied sciences; Bidding strategies; Commodity prices; Cost; Economic data; Electric energy; Energy; Energy economics; Energy market; Energy policy; Energy prices; Exact sciences and technology; General, economic and professional studies; Market theory; Markets; Natural energy; Netherlands; Optimization techniques; Power generation; Power marketers; Price uncertainty; Prices; Profitability; Profits; profits and margins; Stochastic programming; Studies; Wind energy; Wind power
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2012.10.011

The paper assesses bidding strategies for a wind power producer in the Netherlands. To this end, a three-stage stochastic optimization framework is used, maximizing wind power producer's profit using the day-ahead and cross-border intraday market, taking into account available interconnection capacity. Results show that the wind power producer can increase its profits by trading on the intraday market and – under certain imbalance prices – by intentionally creating imbalances. It has been considered uncertainties about prices, power forecast and interconnection capacity at the day-ahead and intraday timeframes. ► A cross-border bidding strategy model for wind power producers has been developed. ► The model was applied to a real case study of a Dutch offshore wind power producer. ► Under certain imbalance prices, it is not profitable to deliver all possible power. ► Intraday markets give the possibility to reduce imbalance costs. ► Integration of intraday markets will increase liquidity.