Analyzing the Impact of Strategic Bidding on the Reserve Capacity via a Bi-Level Model
Fuente:
arXiv
Enregistré dans:
| Auteurs principaux: | , , , , , , , |
|---|---|
| Format: | Preprint |
| Publié: |
2025
|
| Sujets: | |
| Accès en ligne: | |
| Tags: |
Ajouter un tag
Pas de tags, Soyez le premier à ajouter un tag!
|
| _version_ | 1866908421559681024 |
|---|---|
| author | Xu, Yun Bai, Yunxiao Zhang, Yunyong Wang, Peng Wang, Xuelin Guo, Jiqun Xie, Kaijun Zhao, Rusheng |
| author_facet | Xu, Yun Bai, Yunxiao Zhang, Yunyong Wang, Peng Wang, Xuelin Guo, Jiqun Xie, Kaijun Zhao, Rusheng |
| contents | The growing integration of renewable energy sources necessitates adequate reserve capacity to maintain power balance. However, in market clearing, power companies with flexible resources may submit strategic bids to maximize profits, potentially compromising system reserves. This paper examines the effects of such strategic behavior by modeling the market as a bi-level problem. The upper level represents a strategic company aiming to maximize profit, while the lower level simulates the system operator clearing the market based on submitted offers. To enable duality-based solution methods, we approximate unit commitments with a continuous reserve capacity calculation. Case studies indicate that, in an imperfectly competitive market, more units are incentivized to operate,enhancing system reserves. However, some units go online mainly for profit, ultimately raising electricity costs for consumers. These findings highlight the importance of market design in managing the trade-off between reserve adequacy and economic efficiency in the presence of strategic bidding behavior. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2506_20493 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Analyzing the Impact of Strategic Bidding on the Reserve Capacity via a Bi-Level Model Xu, Yun Bai, Yunxiao Zhang, Yunyong Wang, Peng Wang, Xuelin Guo, Jiqun Xie, Kaijun Zhao, Rusheng Systems and Control Computer Science and Game Theory The growing integration of renewable energy sources necessitates adequate reserve capacity to maintain power balance. However, in market clearing, power companies with flexible resources may submit strategic bids to maximize profits, potentially compromising system reserves. This paper examines the effects of such strategic behavior by modeling the market as a bi-level problem. The upper level represents a strategic company aiming to maximize profit, while the lower level simulates the system operator clearing the market based on submitted offers. To enable duality-based solution methods, we approximate unit commitments with a continuous reserve capacity calculation. Case studies indicate that, in an imperfectly competitive market, more units are incentivized to operate,enhancing system reserves. However, some units go online mainly for profit, ultimately raising electricity costs for consumers. These findings highlight the importance of market design in managing the trade-off between reserve adequacy and economic efficiency in the presence of strategic bidding behavior. |
| title | Analyzing the Impact of Strategic Bidding on the Reserve Capacity via a Bi-Level Model |
| topic | Systems and Control Computer Science and Game Theory |
| url | https://arxiv.org/abs/2506.20493 |