Generation bidding strategies for marginal price based power market

The imperfect competition emerging in electricity market makes it possible for power generators to gain more profits through strategic bidding. Through analyzing the relationship between the clearing results and the coefficients of generators' bidding parameters, an optimal bidding strategy for a single generating unit is presented and an optimal adjusting method is also given for use when the generating unit's output exceeds its generation limits. An iterative method is applied to the clearing market to calculate coefficients of plant's bidding strategy. For the generating units belonging to the same plant, this paper puts forward an optimal combination bidding strategy model. Examples are used to demonstrate the feasibility of the proposed method and the results indicate that the bidding strategy developed in this paper can lead to sizeable profits for generators in a market competition environment.