Impacts of strategic behavior of wind power plants on electricity markets: A supply function equilibrium approach

In this paper, the impacts of strategic behavior of wind power plants on electricity markets is studied both in mid and short-terms. To this end, the following schemes for participating wind power plants in electricity markets are proposed and compared: 1) wind power plant as a price-taker producer, and 2) wind power plant as a strategic producer which games in supply function. For this study, we need to know the bids of producers. To overcome this problem, it is assumed that the market has approached to its Nash equilibrium and the proposed schemes are compared at their Nash equilibrium. To consider uncertainty in wind power, different scenarios are considered for wind generation based on its probability density function. For mid-term study, it is assumed that the only available information about realization of wind power is the probability density of wind speed. For short-term study, it is assumed that wind power can be forecasted with a specified probability density function. Finally, to evaluate the strategic behavior of wind power plants, the proposed schemes are compared by applying them to a test system.