Bidding Strategy and Package Design of Electricity Retailers Participating in Auxiliary Service Market

Abstract

This paper analyzes the characteristics of the auxiliary service market mechanism under the opening of the electricity selling side and establishes a bidding model for the electricity retailer to participate in the auxiliary service market. The established model not only considers the profit maximization of market participants, but also considers that the system needs to maximize social welfare to clear the market. The KKT condition is used to transform the outer optimization model into the constraint condition of the inner optimization model and then the solution is carried out. The validity of the model is proved by an example. The analysis shows that the electricity retailer can design a reasonable auxiliary service package to attract users to participate in the auxiliary service, and gain profits by having resources to participate in the auxiliary service market during the high load period. At the same time, it can avoid buying electricity in the wholesale market with high electricity price, so as to bring higher profits.