Optimal Bidding in Electricity Market Using Game Theory

This paper, presents a new approach for bidding strategy in spot electricity markets. A two-level optimization method is used for profit maximization of non-cooperative firms, while taking into account overall system constrains. In this approach, the market equilibrium points are determined as Nash Equilibria. In order to capture the behavior of all market participants and therefore, a much more competitive environment both the suppliers and consumers are considered as the players of the market. To avoid local maxima solutions, Genetic Algorithm based optimization is incorporated. The proposed method has been applied to IEEE 9 bus system with satisfactory results.