Abstract
Problem Statement: Deregulation power systems have been force to change their structures, from vertically integrated to open market systems. Each generation company (Genco) is required to compete with rivals through bidding in a pool market and making a bilateral contract with a distribution company (Disco) or consumers to maximize its own profits. A unit commitment becomes responsible for each Genco and difficult for Genco that have one generation plant or small generation capacity. The objective of a Genco is to maximize its profits with makes a decision submit bidding price function to the Independent System Operator (ISO). In order to achieve this goal, it is necessary and important for a small Genco to build optimal bidding strategies considering a bilateral contract and a unit commitment with constraints in time periods for possibilities to get a discontinuous dispatch that could reduce total profits. Approach: The proposed methodology employs an optimization method like Lagrange Relaxation to solve the optimal bidding problem. The solution procedure is applied in the study case and change the market condition to show the effect of bilateral contract to marginal clearing price (MCP), generation output and total profit for a small Genco. Result: The result of the proposed method shows that a Genco can build optimal bidding strategies to maximize total profit considering unit commitment and bilateral contract. Simulation results of a numerical example have demonstrated the bilateral contract reduced the hourly MCP. The bilateral contract will guarantee the Genco getting continuous dispatch during time periods. Conclusions/Recommendations: The proposed method for building optimal bidding strategies in a day-ahead electricity market to maximize total profit considering unit commitment and bilateral contract is helpful for a Genco to make decision in submit bidding to an ISO.
Highlights
Deregulation and reforms in the electricity market have created a competitive open market environment
Perfect market competition: It is observed from Fig. 3, that Market Clearing Price (MCP) is lower in case 2 than case 1
The change of trading quantity of generation company (Genco) 4 did not effect to MCP as shown in graph of case 2 with Genco 4 have bilateral contract 5MW, 10MW and 15MW, respectively
Summary
Deregulation and reforms in the electricity market have created a competitive open market environment. In order to build optimal bidding strategies, a Genco should consider a bilateral contract and a unit commitment with constraints in time periods (for example minimum up and down time, start-up and shut-down costs) for possibilities to getting discontinuous dispatch that could reduce total profits. Where: R = The marginal clearing price Q = The pool load forecasted Pj = The generation output jth Genco strategy using Markov Decision Process (MDP) was applied to derive the studied Gencos bidding decision is presented in[8]. Dealing with optimal bidding in electricity market without considering unit commitment and bilateral contract. The profit function of jth Genco is modified as: electricity market with four Gencos used to demonstrate the effect of trading quantity on MCP, generation πj = R.Pj + R b.Pb − C(Pj + Pb ).
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