Price-Takers’ Bidding Strategies in Joint Energy and Spinning Reserve Pay-as-Bid Markets

Strategic bidding in joint energy and spinning reserve markets is a challenging task from the viewpoint of generation companies (gencos). in this paper, the interaction between energy and spinning reserve markets is modeled considering a joint probability density function for the prices of these markets. considering pay-as-bid pricing mechanism, the bidding problem is formulated and solved as a classic optimization problem. the results show that the contribution of a genco in each market strongly depends on its production cost and its level of risk-aversion. furthermore, if reserve bid acceptance is considered subjected to winning in the energy market, it can affect the strategic bidding behavior.