Modeling Strategic Behaviors of GenCos With Joint Consideration on Spot and Medium & Long-term Electricity Markets

Intermittent renewable energy has rapidly developed worldwide and has been required to participate in the market. Since renewable energy's fluctuating and uncertain nature will bring significant risks to the electricity spot market, the medium & long-term electricity market is receiving broad attention. Generation companies (GenCos) may distort market prices through strategic behaviors in a two-stage market composed of the medium & long-term market and the spot market. This paper establishes a mathematical problem with an equilibrium constraints (MPEC) model to simulate the strategic behaviors of GenCos in the two-stage market. The nonlinear model is linearized through the strong duality theorem and the binary expansion approach. Finally, numerical analysis shows the model's effectiveness in simulating the behaviors of strategic GenCo.