Evaluating alternative offering strategies for wind producers in a pool

As wind power technology matures and reaches break-even cost, wind producers find it increasingly attractive to participate in pool markets instead of being paid feed-in tariffs. The key issue is then how a wind producer should offer in the pool markets to achieve maximum profit while controlling the variability of such profit. This paper compares two families of offering strategies based, respectively, on a naive use of wind production forecasts and on stochastic programming models. These strategies are compared through a comprehensive out-of-sample chronological analysis based on real-world data. A number of relevant conclusions are then duly drawn.

► Out-of-sample analysis allows comparing diverse offers using real-world data.
► Offering the best production forecast is not optimal for a wind producer.
► Stochastic programming offers lead to maximum expected profit.
► Offering the best production forecast is not generally optimal for risk control.
► Stochastic programming offers lead to the best tradeoff profit versus risk.