Investigating the Effect of Demand Response on the Market Power of a Strategic Wind Power Producer

Abstract

Recent restructure and expansion of electric network enabled the end-use customers to participate in local energy markets by managing their consumption/production. In this context, this paper proposes a mathematical approach for price maker WPP offering strategy with considering risk criteria. In fact, to assess risk aversion behavior of the WPP, CVaR as a measurement tool is implemented in the problem considering transactions and expected profit. Finally, an assessment framework is established to evaluate the benefits of implementing DR programs on the energy costs and the individual profit of the WPP. Also, effective metrics are implemented to the problem to evaluate the effect of implementing DR programs on the market power of the WPP. The results show that with implementing DR actions, the electricity price in most hours remained the same which implies the reduction in market power of the WPP.