Probabilistic GENCOs Bidding Strategy in Restructured Two-Side Auction Power Markets

Abstract

As a matter of course, power market uncertainties escalation is by product of power industry restructure on one hand and the unrivalled penetration of renewable energies on the other. Generally, the decision making process in such an uncertain environment faces with different risks. In addition, the performance of real power markets is very close to oligopoly markets, in which, some market players exercise market power to influence the power market and this matter brings some risks to other players. Hence, each market player must consider these market features to choose his best decision. So, in case of such an uncertain environment, GENCO's bidding strategy would be a complicated and error-prone process. This paper aims to ease this issue suggesting the use of probabilistic bidding strategy of generation units by the unscented transformation (UT) method. The proposed method can consider the correlation between variables, where it models the coalition between market participants. Using the proposed methodology, a market participant can choose a desired range of profit; then, set his decision to manage his profit by reducing his risks. Finally, the proposed methodology is examined through some case studies done in a standard test system. Simulation results show that executing market power by some market players disturbs the competition in the market.