Bidding Strategy in Energy and Spinning Reserve Markets for Aluminum Smelters' Demand Response

Aluminum smelting is an energy-intensive electrolytic process that is widely used to produce aluminum. The electricity cost thereby constitutes a significant portion of the total operation cost. At the same time, the smelting process is able to change its power consumption both accurately and quickly by controlling the pots' DC voltage, without affecting the production quality. Hence, an aluminum smelter has both the motivation and the ability to participate in demand-side management. By bidding into the electricity market, the smelter provides flexibility to the power system operator and gets compensation which reduces the overall electricity cost. In this paper, we focus on determining the optimal bidding strategy in the day-ahead energy and spinning reserve markets for an aluminum smelter. The approach is based on stochastic programming in which the market prices are the stochastic variables. Case studies demonstrate the effectiveness of the approach and provide insights into the demand-side management for industrial plants.