Optimal Offering of a Power Producer in Electricity Markets With Profile and Linked Block Orders

Block orders are increasingly adopted in many electricity markets as they enable power producers to implicitly express their unit commitment characteristics and address price volatility risks. However, previous work on the optimal offering problem of a price-taking producer participating in such markets has only considered the simplest type of block orders (regular block orders-RBO) and has neglected relevant realistic market regulations. This paper addresses these simplifications by proposing a new optimal offering model which also considers the more complex profile block orders (PBO) and linked block orders (LBO). This model is generic in that it can treat the block orders' time spans either as fixed parameters (following the modelling approach of previous work) or as endogenous decision variables, which constitutes a completely novel modeling approach. The presented case studies demonstrate that this novel approach yields a tremendously lower number of binary variables and more efficient computational performance, when PBO and LBO are considered. Furthermore, the case studies analyze the physical conditions under which the introduction of different types of block orders increases the examined producer's profit.