Optimal electricity market bidding strategies considering emission allowances

Corchero, Cristina; Heredia, F.-Javier; Cifuentes, Julián

doi:10.1109/eem.2012.6254676

Cited by 7 publications

(24 citation statements)

References 13 publications

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“…In this reference, by defining two different scenarios of the carbon dioxide emission price, the changes of GenCos' generation are evaluated. In a study by Corchero et al [29], the effects of emission of two different technologies, thermal and combined cycle gas turbine units are described in the generation-side bidding strategy problem. In another study [30], a normal boundary intersection is used to optimize profit and emission costs in the generation-side bidding strategy.…”

Section: Literature Review and Contributionsmentioning

confidence: 99%

An environmental/techno-economic approach for bidding strategy in security-constrained electricity markets by a bi-level harmony search algorithm

Shivaie

Ameli

2015

Renewable Energy

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a b s t r a c tIn this paper, a new approach is presented for developing optimal double-sided bidding strategy in security-constrained electricity markets by considering emission of pollutants, as further objectives. In the proposed methodology, both Generation Companies (GenCos) and Distribution Companies (DisCos) try to maximize their profit by implementation of optimal strategies, whiles they have incomplete information about their rivals and market mechanism of payment is locational marginal pricing. In addition, each participant provides its strategic bids based on supply function equilibrium model and it modifies its bidding strategies until Nash equilibrium points are computed. The proposed approach is modeled as a bi-level optimization problem with the upper sub problem addressing individual GenCos and DisCos and the lower sub problem addressing the Independent System Operator (ISO). The upper level maximizes the individual market participant's profit and the lower one solves the ISO's market clearing problem for maximizing Community Welfare Function (CWF). A Self-adaptive Global-based Harmony Search Algorithm (SGHSA) is used to obtain optimal bidding strategies. The proposed methodology has been implemented on the 6-machine 8-bus system test system to demonstrate the feasibility and effectiveness of the proposed approach. Simulation results illustrate the profitableness of the newly developed approach in the obtaining optimal bidding strategies.

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Section: Literature Review and Contributionsmentioning

confidence: 99%

An environmental/techno-economic approach for bidding strategy in security-constrained electricity markets by a bi-level harmony search algorithm

Shivaie

Ameli

2015

Renewable Energy

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“…The second type of modeling analyzes the influence of environmental considerations-nitrogen oxides (NO x ), sulfur oxides (SO 2 ), and carbon dioxide (CO 2 ) emission limits of the GenCoson the unilateral generation-side bidding strategy problem within energy-only electricity markets. [18][19][20][21][22][23] In Peng et al, 18 the impact of emission compliance is investigated on the strategic behavior and profitability of the GenCos in a uniform electricity market by considering market power. In this formulation, a single-level model using only one strategic coefficient is employed, ignoring the transmission security constraints and loss considerations.…”

Section: Background and Motivationmentioning

confidence: 99%

“…In the lower-level problem, then, the NO x emission function is applied as an exponential function, and the SO 2 and CO 2 emission functions are implemented as polynomial functions, as formulated in equations ( 21) through (23), respectively. The fifth term of equation (19) expresses the expected profit functions of the DisCos in the day-ahead electricity markets. Power balance limitation is addressed by equation (24).…”

Section: Lower-level Problem: Joint Day-ahead Energy and Reserve Elec...mentioning

confidence: 99%

“…In this formulation, a single-level model using only one strategic coefficient is employed, ignoring the transmission security constraints and loss considerations. In literature, 19,20 a profit-based linearized model is developed for solving the bidding strategy problem of the high- and low-emission GenCos in a day-ahead electricity market. In both studies, 19,20 even though the emissions are kept at a favorable level without a critical reduction in the total profit of the GenCos, a single-level model with a linearized bidding curve is applied, while simultaneously disregarding technical measures.…”

Section: Introductionmentioning

confidence: 99%

“…In literature, 19,20 a profit-based linearized model is developed for solving the bidding strategy problem of the high- and low-emission GenCos in a day-ahead electricity market. In both studies, 19,20 even though the emissions are kept at a favorable level without a critical reduction in the total profit of the GenCos, a single-level model with a linearized bidding curve is applied, while simultaneously disregarding technical measures. An emission-reduction, two-level model is developed in Vahidinasab and Jadid 21 in order to obtain the optimal bidding strategies of the GenCos in an oligopoly electricity market, while taking into account both market power and transmission security constraint considerations.…”

Section: Introductionmentioning

confidence: 99%

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Bilateral bidding strategy in joint day-ahead energy and reserve electricity markets considering techno-economic-environmental measures

Shivaie

Kiani-Moghaddam

Weinsier

2021

Energy & Environment

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In this study, a new bilateral equilibrium model was developed for the optimal bidding strategy of both price-taker generation companies (GenCos) and distribution companies (DisCos) that participate in a joint day-ahead energy and reserve electricity market. This model, from a new perspective, simultaneously takes into account such techno-economic-environmental measures as market power, security constraints, and environmental and loss considerations. The mathematical formulation of this new model, therefore, falls into a nonlinear, two-level optimization problem. The upper-level problem maximizes the quadratic profit functions of the GenCos and DisCos under incomplete information and passes the obtained optimal bidding strategies to the lower-level problem that clears a joint day-ahead energy and reserve electricity market. A locational marginal pricing mechanism was also considered for settling the electricity market. To solve this newly developed model, a competent multi-computational-stage, multi-dimensional, multiple-homogeneous enhanced melody search algorithm (MMM-EMSA), referred to as a symphony orchestra search algorithm (SOSA), was employed. Case studies using the IEEE 118-bus test system—a part of the American electrical power grid in the Midwestern U.S.—are provided in this paper in order to illustrate the effectiveness and capability of the model on a large-scale power grid. According to the simulation results, several conclusions can be drawn when comparing the unilateral bidding strategy: the competition among GenCos and DisCos facilitates; the improved performance of the electricity market; mitigation of the polluting atmospheric emission levels; and, the increase in total profits of the GenCos and DisCos.

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