A Risk-Aware Bi-Level Model for Contract Decomposition of Power Generators Considering Renewable Energy Accommodation

To coordinate medium- to long-term (MLT) contracts with day-ahead spot (DAS) market trading, contracted electricity must be decomposed into shorter time scales. Conventional generators' contract decomposition strategies influence their DAS market bidding and generation dispatch, thereby affecting renewable energy (RE) accommodation. Therefore, these decomposition strategies must account for both RE accommodation impacts and risks arising from RE output uncertainties. This paper proposes a risk-aware bi-level model for decomposing the conventional generators' MLT contracts while accounting for RE accommodation. The upper level optimizes contract decomposition curves for each conventional generator from the market operator's perspective, employing conditional value-at-risk (CVaR) to quantify risks and incorporate costs associated with RE deviations. The lower level formulates a supply function equilibrium model for conventional generators' participation in DAS market competition. The bi-level model is transformed into a singlelevel optimization problem using the nonlinear complementarity method for tractability. Numerical simulations are presented to verify the effectiveness of the proposed model.