A Game Theoretical Approach Based Bidding Strategy Optimization for Power Producers in Power Markets with Renewable Electricity

Yi Tang, Jing Ling, Tingting Ma, Ning Chen, Xiaofeng Liu and Bingtuan Gao
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Yi Tang: School of Electrical Engineering, Southeast University, Nanjing 210096, China
Jing Ling: School of Electrical Engineering, Southeast University, Nanjing 210096, China
Tingting Ma: School of Electrical Engineering, Southeast University, Nanjing 210096, China
Ning Chen: China Electric Power Research Institute, Nanjing 210003, China
Xiaofeng Liu: School of Electrical Engineering, Southeast University, Nanjing 210096, China
Bingtuan Gao: School of Electrical Engineering, Southeast University, Nanjing 210096, China

Energies, 2017, vol. 10, issue 5, 1-16

Abstract: In a competitive electricity market with substantial involvement of renewable electricity, maximizing profits by optimizing bidding strategies is crucial to different power producers including conventional power plants and renewable ones. This paper proposes a game-theoretic bidding optimization method based on bi-level programming, where power producers are at the upper level and utility companies are at the lower level. The competition among the multiple power producers is formulated as a non-cooperative game in which bidding curves are their strategies, while uniform clearing pricing is considered for utility companies represented by an independent system operator. Consequently, based on the formulated game model, the bidding strategies for power producers are optimized for the day-ahead market and the intraday market with considering the properties of renewable energy; and the clearing pricing for the utility companies, with respect to the power quantity from different power producers, is optimized simultaneously. Furthermore, a distributed algorithm is provided to search the solution of the generalized Nash equilibrium. Finally, simulation results were performed and discussed to verify the feasibility and effectiveness of the proposed non-cooperative game-based bi-level optimization approach.

Keywords: bidding strategy; non-cooperative game; competitive electricity market; bi-level optimization (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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