The Effects of Spinning Reserve Uncertainty and Demand Response Programs on Transmission-Constrained Bidding Strategy

In the electricity market, generation company attempts to maximize their profit in a bidding strategy approach. As the transactions of power and spinning reserve are done in a transmission network, consideration of transmission constraints and spinning reserve uncertainties becomes necessary. In the bidding strategy problem, there are various demand uncertainties. Usually, electricity markets consider a fixed spinning reserve with fixed request probability to ensure that demand is met. However, the actual spinning reserve is stochastic in quantity and requests hours that should be modeled and simulated. Another demand uncertainty is demand response programs include various stochastic types. One of the most famous demand response programs is electric vehicle parking with stochastic charging/discharging amounts and hours. The objection of this study is solving the bidding strategy problem considering transmission constraints, spinning reserve uncertainty, and electric vehicle parking as a demand response program based on a heuristic approach. An actual spinning reserve model using normal distribution is proposed and three case studies are presented. In the first case, improvement in profit of the generation company by 4.15-47.95% and 20.84-31.30% under single and double-sided auctions are reached, respectively. Where transmission constraints and spinning reserve uncertainty are considered, the optimal bidding strategy problem is solved in the energy and spinning reserve market for three-generation companies in the IEEE 6-bus network where transmission constraints are satisfied at all scenarios of spinning reserve requests. When electric vehicle parking is considered, it is shown that demand response programs have direct effects of bidding parameters such as market clearing price, generation companies power awarded and profits.