Management of Bilateral Contracts for Gencos Considering the Risk in Spot Market

In electricity market, generation companies (Gencos) face the risk in both the spot market and contract market. Their strategies of contracts in electricity market will directly affect their profits. Therefore, it is crucial for Gencos to determine the total amount of contracts at a certain risk. This paper proposes an optimal management of contract power for generators considering bidding risks in spot market. Based on the risk-based Pareto front, the power quantity-price bidding curve of generators is constructed. We build a bi-level optimization model with upper-level objective function as generators revenue maximization and lower-level total objective function as production cost minimization. The Differential Evolution (DE) technique and Optimal Power Flow (OPF) tools are utilized in model solving. The simulation results of the modified IEEE system show the feasibility and effectiveness of this strategy. (C) 2019 The Authors. Published by Elsevier Ltd.