Coalition-based Bidding Strategies for Integrating Renewable Energy Sources in Electricity Market

In this paper we propose a cooperation framework to analyze coalition-based bidding strategies in electricity market when participants have renewable energy sources such as solar photovoltaic and wind farms. Along with quantile bidding strategy using probabilistic distribution of renewable generation, we also consider a forecast bidding strategy. We show that the grand coalition incentivizes all participants when the market rule forces participants to hid their minimum commitment, which incurs penalty if not fulfilled, and excess generation may be spilled for free or at no cost. Simulations show that the forecast bidding outperforms the previous quantile bidding, e.g., individual and social welfare can increase by up to 97% and 67%, respectively.