In countries with an extended use of district heating (DH), the integrated operation of DH and power systems can increase the flexibility of the power system, achieving a higher integration of renewable energy sources (RES). DH operators can not only provide flexibility to the power system by acting on the electricity market, but also profit from the situation to lower the overall system cost. However, the operational planning and bidding includes several uncertain components at the time of planning: electricity prices as well as heat and power production from RES. In this publication, we propose a planning method based on stochastic programming that supports DH operators by scheduling the production and creating bids for the day-ahead and balancing electricity markets. We apply our solution approach to a real case study in Denmark and perform an extensive analysis of the production and trading behavior of the DH system. The analysis provides insights on system costs, how DH system can provide regulating power, and the impact of RES on the planning.
@cite_24: A virtual power plant aggregates various local production consumption units that act in the market as a single entity. This paper considers a virtual power plant consisting of an intermittent source, a storage facility, and a dispatchable power plant. The virtual power plant sells and purchases electricity in both the day-ahead and the balancing markets seeking to maximize its expected profit. Such model is mathematically rigorous, yet computationally efficient.
@cite_12: We review some mathematical programming models that capture the optimal bidding problem that power producers face in day-ahead electricity auction markets. The models consider both price-taking and non-price taking assumptions. The models include linear and non-linear integer programming models, mathematical programs with equilibrium constraints, and stochastic programming models with recourse. Models are emphasized where the producer must self-schedule units and therefore must integrate optimal bidding with unit commitment decisions. We classify models according to whether competition from competing producers is directly incorporated in the model.
@cite_20: In this paper, we analyze the impact of renewable energies, wind and photovoltaic, on the formation of day-ahead electricity prices at EEX. We give an overview of the policy decisions concerning the promotion of renewable energy sources in Germany and discuss their consequences on day-ahead prices. An analysis of electricity spot prices reveals that the introduction of renewable energies enhances extreme price changes. In the frame of a dynamic fundamental model, we show that there has been a continuous electricity price adaption process to market fundamentals. Furthermore, the fundamental drivers of prices differ among hours with different load profiles. Our results imply that renewable energies decrease market spot prices and have implications on the traditional fuel mix for electricity production. However, the prices for the final consumers increased overall because they must pay in addition the feed-in tariffs for the promotion of renewable energy.
@cite_2: 
Apart from the operational planning, planning methods have to consider the bidding in electricity markets. Nowadays, producers often base their offers on the given electricity price forecast, which is very volatile due to the variability of RES production and uncertain one day before the energy is delivered @cite_20 . Additionally, the production from RES in the DH system itself is uncertain. Consequently, tools that optimize the operation of DH systems and propose bidding strategies need to consider the uncertainty given by price and production. Despite several bidding strategies for price-taker power producers in the day-ahead market have been proposed, (see references in @cite_12 ), the authors in @cite_24 demonstrate that under high uncertainty of electricity prices the use of stochastic programming @cite_2 for creating bidding curves for the day-ahead market renders good solutions that consider the uncertainty involved in the bidding process. Based on the representation of the uncertain electricity prices as scenarios, the authors use non-anticipativity constraints that order the bids presented to the market in a step-wise manner to create price dependent bids.