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Tabl e 1.
Cost parameters of generators
Generator
a
i
($
/MW h
)
c
i
($
/MW
2
h
)
1
12.0
1.0
2
10.0
1.5
3
8.0
2.0
there is an IL contract in the wholesale market which can be exercised at a
future time
t
(1h). Let
Q
and
k
0
denote the IL contract volume and the trigger
price, respectively. In period
t
, assume that
μ
=20MW,
A
=200MW. The Monte
Carlo simulation is employed to deal with uncertainty of the wind power.
4.1 Impacts of IL Contract Volume on Market Equilibrium
When
k
0
=100$/MWh, the variations of the mean value and the standard devia-
tion of the equilibrium market price with increasing the IL contract volume are
shown in Fig.2, where the impacts of the wind power output uncertainty and
the demand elasticity are considered. It can be found that introduction of the
IL contract can reduce the equilibrium market price and its volatility. Especially
when the uncertainty of wind power output is relatively large, this effect is more
obvious. The reason is that, a higher volatility of wind power output makes it
more possible to exercise the IL contract, thus the equilibrium market price and
its fluctuation will be lessened more effectively. These results show that the in-
troduction of IL programs can increase the system flexibility and is conducive
to wind power integration into power systems. Furthermore, it can also be seen
that, when the demand elasticity is relatively low, the generator has relatively
strong ability to exert market power and raises market price. For this case, the
IL program can be used to reduce the equilibrium market price and its volatility
more effectively.
Fig. 2.
Impact of IL contract volume on the mean value and the standard deviation of
market price
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