Regulatory support of wind power producers against strategic and collusive behavior of conventional thermal units

Abstract

Although wind power generation has extended a maturity in technology, there are still many concerns regarding the optimal support of regulatory bodies for renewable resources. In this context, the regulatory body should form a market structure or consider market rules and regulations to not only attract investors to renewable power plants, but also provide an efficient market that reflects a safe and clear competition environment. In this paper, an agent-based game-theoretic model is developed to investigate the electricity market behavior under oligopoly circumstances. The proposed model reveals the potential of collusive and strategic behavior of market participants. By employing the proposed model, impacts of different supportive schemes on the behavior of the wind power producer and conventional thermal units are investigated. According to the results obtained, if the regulatory bodies do not consider strategic collusion of market participants, adverse consequences for wind power producers might happen in the long-term horizon.