Bidding strategies based on bid sensitivities in generation auction markets

The concept of bids sensitivities is presented, i.e. the first-order derivatives of nodal prices, generation outputs, unit profits and transmission line power with respect to each unit's bids. The bids that cacti generator submits are the coefficient of its quadratic cost function. The bids' sensitivities are derived based on the interior-point optimal power flow (IPOPF) model, then an IPOPF-based bidding model is used for individual supplier to generate its optimal bids in the electricity generation auction market. The objective function of this bidding model is to maximise the individual supplier's profit and its constraints are the OPF problem. i.e. each generator submits its optimal bid by taking into account not only its own profit maximisation but also the system securities, and so on. This optimisation model is tested in the IEEE 30-bus system and some results are presented.