Renewable resources bids for participating in energy market. There are many effective bidding strategies available in the literature as a bidding strategy tool for conventional power plants. Do you think those available tools adequate for renewable resources or new tools should be developed? If you think new tools should be developed, what kind of considerations should be taken into account in the new tools? Thank you.
The first thing it will depend on is the type of energy market - whether it is a capacity market or a wholesale generation market, such as the NEM in Australia. I have more knowledge of wholesale markets than capacity markets, so perhaps someone else can give you information on capacity markets.
In the NEM in Australia, all generation types are required to bid into the market, whether conventional or renewable. Their bidding strategies will depend on the operating characteristics of the generation type and their marginal cost. For example, a coal plant often has the characteristic of slow ramp speeds and will often bid low to avoid turning down or off during times of low demand in order to be operating at high capacity when demand is high. Gas, hydro and renewables are all very quick to dispatch and quite flexible - gas and hydro are often used for peaking generation, whereas coal is used for baseload (as nuclear would also be).
Due to the variable nature of their generation and their low operating costs, RE generators will always attempt to dispatch all of their generation when possible in order to maximise profit. Their ability to do so can be supported by some policy mechanisms. As an example, in Australia, large scale renewable generators gain renewable energy certificates (RECs, 1 REC per 1MWh of RE generation) in addition to their spot market revenue. These certificates can be traded or sold for an agreed value to liable entities. This allows RE generators to bid into the spot market at negative values while still making a net profit per MWh. The low bid price ensures that the RE will be dispatched ahead of more conventional generation.
Hi Reza,
Frankly, this is a very open ended question with a lot of research effort going into it. And more will be going on, we are sure !
For the moment, I would suggest three considerations to be included (other than the avenues in which work is already in progress):
With best wishes.
-Sanjay
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