Market Power of Coordinated Hydro-wind Joint Bidding: Croatian Power System Case Study

Abstract

The paper analyses the coordinated hydro-wind power generation considering joint bidding in the electricity market. The impact of mutual bidding strategies on market prices, traded volumes, and revenues has been quantified. The coordination assumes that hydro power generation is scheduled mainly to compensate the differences between actual and planned wind power outputs. The potential of this coordination in achieving and utilizing of market power is explored. The market equilibrium of asymmetric generation companies is analyzed using a game theory approach. The assumed market situation is imperfect competition and non-cooperative game. A numerical approximation of the asymmetric supply function equilibrium is used to model this game. An introduced novelty is the application of an asymmetric supply function equilibrium approximation for coordinated hydro-wind power generation. The model is tested using real input data from the Croatian power system.