Analysis of bidding-strategy for leadership-company in power market

Abstract

In electricity market environment, bidding strategies employed by generation companies have significant impacts on their own profits and market's economic characteristics. The leadership-company, which has large capacity and low cost in system, may exert the competition superiority by employing bidding strategies, such as capacity withholding, to gain additional profits. Thus, how to investigate the strategic bidding behaviors and how to analyze potential market power of leadership-company are important research areas in electricity market. The pricing model of leadership-company based on optimization is proposed in this paper. The optimal bidding capacities, profits and settlement prices can be produced by an iteration algorithm. The results are compared with the corresponding data of normal competition to evaluate the bidding behaviors of a leadership-company. Based on the varying loads of a whole day, the bidding strategies of a leadership-company have been analyzed by a simple 8-bus system example.