Optimized Bidding Strategy of Generation Companies in the Energy and Reserve Markets by Game Theory

In this paper, a new bidding strategy will be modeled for the day-ahead market. Algorithm gained for this model, is produced by a company which its aim is to maximize its profit as a participant in the active power and spinning reserve. In this method, the forecasted energy price method, and the forecasted reserve price are used as the bidding strategy of possible price of a generation company in both markets. For determination of the reserve amount, two pricing models are used in combined markets. A bi level optimization method in which in the first level the subject of maximizing the profit of the generation companies individually is solved in order to get the amount of optimized energy suggested in the markets, and in the second level of optimization, the amount of the energy devoted to each generating unit as a an independent system operator (ISO) will be determined, by use of the results of the first level and network problems. In this paper, game theory is used to organize optimization model. Also, a six bus system is used to indicate the application of the presented model as well as considering its sufficiency. Copyright (C) 2011 Praise Worthy Prize S.r.l. - All rights reserved.