Strategic wind power trading considering rival wind power production

In an electricity market with high share of wind power, it is expected that wind power producers may exercise market power. However, wind producers have to cope with wind's uncertain nature in order to optimally offer their generation, whereas in a market with more than one wind producers, uncertainty of rival wind power generation should also be considered. Under this context, this paper addresses the impact of rival wind producers on the offering strategy and profits of a price-maker wind producer. A stochastic day-ahead market setup is considered, which optimizes the day-ahead schedules considering a number of foreseen real-time scenarios. The results indicate that strategic wind producer is more likely to exercise market power having a mid-mean or low-mean forecast distribution, rather than having a high-mean one. Furthermore, it is observed that its offering strategy varies considerably depending on the rival's wind generation, given that its own expected generation is not high. Finally, as anticipated, expected system cost is higher when both wind power producers are expected to have low wind power generation.