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Abstract(s)
The global transition toward carbon neutrality is accelerating large-scale integration of variable renewable energy sources (vRES), especially onshore wind and solar PV. However, the inherent variability of vRES increases balancing costs, challenging power systems traditionally designed for dispatchable generation. Adapting market structures to these characteristics is critical for a successful energy transition. This work examines the participation of a wind power producer (WPP) in the Iberian electricity market and the Portuguese balancing markets, where WPPs are financially responsible for imbalances and operate without reliance on support schemes. In addition to analysing the evolving MIBEL framework, the study proposes two new market designs: New 1, which allows simultaneous upward and downward bidding each hour, and New 2, which restricts participation to a single direction per hour. Eleven strategic bidding strategies (S1–S11) are developed for vRES active participation, based on probabilistic quantile-based forecasts. These strategies are evaluated across past (S1–S3), current (S4–S7), New 1 (S8), and New 2 (S9–S11) market designs. The results show that New 2 delivers the highest operational and economic efficiency. Among all strategies, prioritizing downward regulation (S11) proves to be the most profitable, increasing wind power value by more than 29% compared to actual market participation. Additionally, three methodologies based on the full balancing cost concept are tested, including the Danish P90 requirement and two new approaches: D90 and DP90. These methods incentivize WPPs to minimize imbalances by allowing market participation only if imbalances remain within a 10 % deadband, based on annual hours (P90), hourly offers (D90), or both (DP90) Findings reveal that P90 and DP90 lead to periods where WPPs fail to deliver nearly 100% of their allocated capacity, whereas D90 caps deviations at 10%, proving to be the most secure and reliable option for system stability.
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Keywords
electricity market variable renewable energy sources wind power producer secondary reserve strategic bidding