Impact of Wind Electricity Forecasts on Bidding Strategies
AbstractThe change in the generation mix from conventional electricity sources to renewables has important implications for bidding behaviour and may have an impact on prices. The main goal of this work is to discover the role played by expected wind production, together with other relevant factors, in explaining the day-ahead market price through a data panel model. The Spanish market, given the huge increase in wind generation observed in the last decade, has been chosen for this study as a paradigmatic example. The results obtained suggest that wind power forecasts are a new key determinant for supply market participants when bidding in the day-ahead market. We also provide a conservative quantification of the effect of such trading strategies on marginal prices at an hourly level for a specific year in the sample. The consequence has been an increase in marginal price to levels higher than what could be expected in a context with notable wind penetration. Therefore, the findings of this work are of interest to practitioners and regulators and support the existence of a wind risk premium embedded in electricity prices to compensate for the uncertainty of wind production. View Full-Text
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Ballester, C.; Furió, D. Impact of Wind Electricity Forecasts on Bidding Strategies. Sustainability 2017, 9, 1318.
Ballester C, Furió D. Impact of Wind Electricity Forecasts on Bidding Strategies. Sustainability. 2017; 9(8):1318.Chicago/Turabian Style
Ballester, Cristina; Furió, Dolores. 2017. "Impact of Wind Electricity Forecasts on Bidding Strategies." Sustainability 9, no. 8: 1318.
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