Optimal Offering Strategies for Renewable Energy Producers: A Coalitional Game Approach

The unpredictable nature of renewable energy imposes a significant impact on the strategic offering decisions of renewable energy producers in two-settlement electricity markets. Due to the uncertainties of renewable energy, the producers must carefully decide on their renewable offerings in the day-ahead market. This paper introduces a coalitional game framework to study the cooperative renewable offering behaviors of multiple producers, wherein these producers are allowed to form a union to share their renewable capacity and real-time balancing risks. We demonstrate that the grand coalition is optimal for maximizing the total profit of the producers, indicating the benefit of cooperation. It is challenging to obtain the core of the coalition due to the huge computational complexity. Nevertheless, we propose a closed-form profit allocation mechanism and prove it is in the core of the coalition. This indicates that none of these producers has an incentive to leave the grand coalition. Finally, we conduct numerical results to validate the established theoretical results.