Risk-averse trading strategy for a hybrid power plant in energy and carbon markets to maximize overall revenue

A risk-averse bidding platform has been proposed in this paper to a hybrid power plant (HPP) that participates as a price-taker player in energy, reserve, and ancillary services markets. A carbon trading market is also being discussed, where the HPP can buy and sell additional carbon credits required for the project. The HPP strikes a balance between selling additional carbon credits and generating more power by gas-fired microturbine. The uncertainty of electricity prices is involved using scenario-based stochastic programming. Penalty charges incurred as a result of variation of renewable generation to manage their uncertainty. For multi-step power markets, the suggested optimization framework derives quantity-price curves using the proposed mixed-integer linear programming. The results indicated that considering carbon quota restricts the operation of microturbines and reduces their revenue by about 60%. On the flip side, the available carbon credits make a considerable revenue for the renewable dominant HPP and increase the total expected profit by 30% and cover the loss of revenue of microturbines. The CVaR is applied to maximize the profit over the 25% of scenarios with the least profit resulting in a 5% reduction of the total revenue under a risk-averse strategy.