A Preliminary Study on Strategic Bidding for Load Server Entities in Single-Seller Electricity Markets with Step-Wise Bidding Protocol

At the present time, the operating electricity markets of all over the world vary from one country to another, but from the aspect of bidding model, which can be classified into two types: the first one is generation-side bidding only, the second one is generation-side and demand-side bidding simultaneously. Broadly speaking, no matter adopt what type of bidding model, the implementation of electricity markets requires that electricity supplying is relatively sufficient; otherwise the electricity prices will rise and reach to an unreasonable degree. In this paper, single-seller bidding model is proposed, which makes a new way for the solving of electricity prices rising when the market is lack of electricity supply. In single-seller electricity markets, the profits of load server entities (LSEs), to a certain extent, depends on their bidding strategies. As a result, a methodological framework is proposed for developing optimal bidding strategies for LSEs participating in a single-seller electricity market in which sealed auction with step-wise quantity/price bidding functions and pay-as-bid settlement protocols are utilized. A normal distribution function is used to describe the bidding behaviors of rivals, and the problem of building optimal bidding strategies for LSEs is then formulated as a stochastic optimization problem, and solved by Monte-Carlo simulation and genetic algorithm. Finally, taking a single-seller electricity market with 4 LSEs as an example, the proposed bidding strategies model is demonstrated by the simulation results