A Comprehensive Survey on GenCos’ Optimal Bidding Strategy Problem in Competitive Power Markets

Document Type: Research Paper

Author

Department of Faculty of Electrical Engineering Shahid Rajaee Teacher Training University

Abstract

This paper represents a complete survey on Generation Companies’ (GenCos’) optimal bidding strategy problem in restructured power markets. In this regard after an introduction to competitive electricity markets, concept of optimal bidding strategy is presented. Considering large amount of works accomplished in this area a novel classification is implemented in order to categorize the existing diverse studies. Accordingly, studies are classified in different categories based on market mechanism, trading mechanism, type of competition, transmission security, type of power plant, type of commodity and type of objective function. For each category, the corresponding studies are presented to show the effectiveness of each item. At the end, the impact of uncertainty and risk on GenCos’ optimal bidding strategy problem is represented and a number of applicable methods to simulate stochastic nature of the problem are investigated. The presented paper may be applicable for that group of researches that are interested in GenCos’ optimal bidding strategy to give a comprehensive perspective in this issue.

Graphical Abstract

A Comprehensive Survey on GenCos’ Optimal Bidding Strategy Problem in Competitive Power Markets

Keywords


[1] Y. Abbasi, N. Bigdeli, and K. Afshar, “Risk-Constrained Optimal Bidding Strategy in Pay-as-Bid Electricity Markets,” IEEE int conference on management and service science, pp. 1-4, 2011.

[2] F. Careri, C. Genesi, P. Marannino, M. Montagna, S. Rossi, and I. Siviero, “Bidding Strategies in Day-Ahead Energy Markets: System Marginal Price vs. Pay as Bid,” IEEE, Energy market, EEM, pp. 1-7, 2010.

[3] M. Kazemi, B. Mohammadi-Ivatloo, and M. Ehsan, “IGDT Based Risk-constrained Strategic Bidding of GenCos Considering Bilateral Contracts,” IEEE, ICEE, pp. 1-6, 2013.

[4] H. Song, C. Liu, and J. Lawarree, "Nash equilibrium bidding strategy in a bilateral electricity market," IEEE Trans, on POWER SYSTEMS, vol. 17, no. 1, pp. 73-79, 2002.

[5] A. Badri, S. Jadid, M. Rashidinejad, M. P. moghaddam, “Optimal bidding strategies in oligopoly markets considering bilateral contracts and transmission constraints,” Electric Power Systems Research, vol. 17, pp. 1089-1098, 2007.

[6] H. Niu, R. Baldick, and G. Zhu, “Supply Function Equilibrium Bidding StrategiesWith Fixed Forward Contracts,” IEEE Trans, on POWER SYSTEMS, vol. 20, no. 4, pp. 1859-1867, 2005.

[7] F. C. Munhoz, P. B. Correia, “Bidding design for price-taker sellers in bilateral electricity contract auctions,” Electrical Power and Energy Systems, vol. 30, pp. 491-495, 2008.

[8] N. Lucas, and P. Taylor, “Characterizing generator behavior: bidding strategies in the pool,” Butterworth-Heinemann Ltd, 1993.

[9] Z. Yuan, D. Liu, and C. Jiung, "Analysis of equilibrium about bidding strategy of suppliers with future contracts," Energy Conversion and Management, vol. 48, pp. 1016-1020, 2007.

[10] A. Conejo, and F. Prieto, “Mathematical programming and electricity markets,” TOP, 9(1), pp. 1-47, 2001.

[11] V. P. Gountis, A.G. Bakirtzis, “Bidding strategies for electricity producers in a competitive electricity market place,” IEEE Trans. Power Syst. 19, pp. 356–365, 2004.

[12] A. Badri, and et al, “Impact of generators' behaviors on Nash equilibrium considering transmission constraints,” European transactions on electrical power, vol. 19, pp. 765-777, 2008.

[13] D. Zhang, Y.Wang, P.B. Luh, “Optimization based bidding strategies in the deregulated market,” IEEE Trans. Power Syst. 15, pp. 981–986, 2000.

[14] T. Li, M. Shahidehpour, “Strategic bidding of transmissionconstrained GenCos with incomplete information,” IEEE Trans. Power Syst. 20, pp. 437–447, 2005.

[15] F. S. Wen, A.K. David, “Oligopoly electricity market production under incomplete information,” IEEE Power Eng. Rev. 21, pp. 58–61, 2001.

[16] R. Ferrero, J. Rivera, M. Shahidehpour, “Applications of games with incomplete information for pricing electricity in deregulated power pools,” IEEE Trans. Power Syst. 13, pp. 184–189, 1998.

[17] R. Ferrero, M. Shahidehpour, V. Ramesh, “Transaction analysis in deregulated power systems,” IEEE Trans. Power Syst. 12, pp. 1340–1347, 1997.

[18] X. Bai, M. Shahidehpour,V. Ramesh, E.Yu, “Transmission analysis by Nash game method,” IEEE Trans. Power Syst. 12, pp. 1046–1052, 1997.

[19] L. Ma, F. Wen, Y. Ni, F.F. Wu, “Optimal bidding strategies for generation companies in electricity markets with transmission capacity constraints taken into account,” in: Proceedings of the IEEE/PES Summer Meeting 2, pp. 2604–2610, 2003.

[20] Y. He, and Y.H. Song, “Integrated bidding strategies by optimal response to probabilistic locational marginal prices,” IEEE Proc.- Gener. Transmission Distribution, vol. 149, no. 6, 2002.

[21] P. Wang, and L. Goel, “Reliability-based reserve management in a bilateral power market,” Electric Power Systems Research, vol. 67, pp. 185-189, 2003.

[22] L. Wu, M. Shahidehpour, and Z. Li, “GenCo’s Risk-Constrained Hydrothermal Scheduling,” IEEE Trans, on Power Systems, vol. 23, no. 4, pp. 1847-1858, 2008.

[23] H. M. I. Pousinho, J. Contreras, A. G. Bakirtzis, and J. P. S. Catalão, “Risk-Constrained Scheduling and Offering Strategiesof a Price-Maker Hydro Producer Under Uncertainty,” IEEE Trans, on Power Systems, pp. , 2013.

[24] C. G. Baslis, and A. G. Bakirtzis, “Mid-Term Stochastic Scheduling of a Price-MakerHydro Producer With Pumped Storage,” IEEE Trans, on Power Systems, vol. 26, no. 4, pp. 1856-1865, 2011.

[25] F. S. Wen, and A. K. David, “Optimally co-ordinated bidding strategies in energy and ancillary service markets,” IEEE Proc. - Gener. Transm. Distrib. 149 (2002) 331–338.

[26] T. Li, M. Shahidehpour, and Z. Li, “Risk-Constrained Bidding Strategy With Stochastic Unit Commitment,” IEEE Trans, on Power Systems, vol. 22, no. 1, pp. 449-458, 2007.

[27] J. Khorasani, and H. RajabiMashhadi, “Bidding analysis in joint energy and spinning reserve markets based on pay-as-bid pricing,” IET Gener. Transmission Distribution, vol. 6, pp. 79–87, 2012.

[28] S. Soleymania, A.M. Ranjbara, and A.R. Shiranib, “New approach for strategic bidding of GenCos in energyand spinning reserve markets,” Energy Conversion and Management, vol. 48, pp. 2044– 2052, 2007.

[29] F. Wen, and A. K. David, “Coordination of bidding strategies in day-ahead energy and spinning reserve markets,” Electrical Power and Energy Systems, vol. 24, pp. 251-261, 2002.

[30] P. Chunhua, and S. Huijuan, “Multi-objective Optimal Strategy of Generating and Bidding on Power Selling Side Considering Environmental Protection and Bidding Risk,” IEEE Int conference on electric utility deregulation andpower technologies, pp. 263-267, 2008.

[31] X. R. Li, C. WaiYu, ZhaoXu, F. JiLuo, Z. YangDong, and K. P. Wong, “A Multimarket Decision-Making Framework forGENCO Considering Emission Trading Scheme,” IEEE Trans, on Power Systems, vol. 28, no. 4, pp. 4099-4108, 2013. [32] X. Ma, “Random-Fuzzy Programming and its Hybrid Intelligent Algorithm to Building Optimal Bidding Strategies for Generation Companies in Electricity Market,” International Conference on Computational Intelligence and Security, 2007. [33] L. A. Barroso, A. Street, S. Granville, and B. Bezerra, “Bidding Strategies in Auctions for Long-Term Electricity Supply Contracts

for New Capacity”, IEEE, Power and energy society meeting, pp. 20- 24, 2008.

[34] X. Yin, J. Zhao, T. Kumar Saha, and Zh. Yang Dong, “Developing GenCo’s Strategic Bidding in an Electricity Market with Incomplete Information,” IEEE, Power and energy society meeting, pp. 1-7, 2007.

[35] J. Liu, Q. Zhu, X. Ma, and Q. Ding, “Random-Fuzzy Programming Based Bidding Strategies for Generation Companies in Electricity Market Environment,” International Conference on Sustainable Power Generation and Supply, 2009.

[36] Y. Song, Y. Ni, F. Wen, Zhijian Hou, and F. F. Wu, “Conjectural variation based bidding strategy in spot markets: fundamentals and comparison with classical game theoretical bidding strategies,” Electric Power Systems Research, vol. 67, pp. 45-51, 2003.

[37] S. Nojavan, K. Zare, and M. R. Feyzi, “Optimal bidding strategy of generation station in power market usinginformation gap decision theory (IGDT),” Electric Power Systems Research, vol. 96, pp. 56– 63, 2013.

[38] Ch. Boonchuay, and W. Ongsakul, “Optimal risky bidding strategy for a generating company by self-organising hierarchical particle swarm optimization,” Energy Conversion and Management, vol 52, pp. 1047–1053, 2011.

[39] M. B. Naghibi-Sistani, M. R. Akbarzadeh-Tootoonchi, M.H. Javidi-DashteBayaz, and H. Rajabi-Mashhadi, “Application of Qlearning with temperature variation for bidding strategies in market based power systems,” Energy Conversion and Management, vol. 47, pp. 1529–1538, 2006.

[40] A. Badri, and M. Rashidinejad, “Security constrained optimal bidding strategy of GenCos in day ahead oligopolistic power markets: A Cournot based model,” Electrical Engineering, Springer, vol. 95, pp. 63-72, 2013.