Skip to main content
SpringerLink
Log in

A Bidding Methodology by Nash Equilibrium for Finite Generators Participating in Imperfect Electricity Markets

  • Original Contribution
  • Published:
Journal of The Institution of Engineers (India): Series B Aims and scope Submit manuscript

Abstract

This paper presents an application of finite n-person non-cooperative game theory for analyzing bidding strategies of generators in a deregulated energy marketplace with Pool Bilateral contracts so as to maximize their net profits. A new methodology to build bidding methodology for generators participating in oligopoly electricity market has been proposed in this paper. It is assumed that each generator bids a supply function. This methodology finds out the coefficients in the supply function of generators in order to maximize benefits in an environment of competing rival bidders. A natural choice for developing strategies is Nash Equilibrium (NE) model incorporating mixed strategies, for solving the bidding problem of electrical market. Associated optimal profits are evaluated for a combination of set of pure strategies of bidding of generators, and payoff matrix has been constructed. The optimal payoff is calculated by using NE. An attempt has also been made to minimize the gap between the optimal payoff and the payoff obtained by a possible mixed strategies combination. The algorithm is coded in MATLAB. A numerical example is used to illustrate the essential features of the approach and the results are proved to be the optimal values.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. K. David, Competitive bidding in electricity supply, in IEE Proceedings of the Generation, Transmission and Distribution (IEEE Xplore, USA, 1993), pp. 421–426

  2. S. Hao, A study of basic bidding strategy in clearing pricing auctions. IEEE Trans. Power Syst. 15, 975–980 (2000)

    Article  Google Scholar 

  3. R.W. Ferrero, J.F. Rivera, Price-taker bidding strategy under price uncertainty. IEEE Trans. Power Syst. 17, 1081–1088 (2002)

    Article  Google Scholar 

  4. A. Saleh, T. Tsuji, T. Oyama, Optimal bidding strategies for generation companies in a day-ahead electricity market with risk management taken into account. Am. J. Eng. Appl. Sci., ISSN 1941-7020,© 2009 Science Publications, 2(1), 8–16, 2009

  5. L. Tao, S. Mohammad, Strategic of transmission constrained Gencos with incomplete information. IEEE Trans. Power Syst. 20, 437–447 (2005)

    Article  Google Scholar 

  6. F. Wen, A.K. David, Optimal bidding strategies and modelling of imperfect information among competitive generators. IEEE Trans. Power Syst. 16(1), 15–21 (2001)

    Article  Google Scholar 

  7. C. Li, A.J. Svoboda, X. Guan, H. Singh, Revenue adequate bidding strategies in competitive electricity markets. IEEE Trans. Power Syst. 14(2), 492–497 (1999)

    Article  Google Scholar 

  8. M. Carrión, A. Conejo, Arroyo journal forward contracting and selling price determination for a retailer. IEEE Trans. Power Syst. 22(4), 2105–2114 (2007)

    Article  Google Scholar 

  9. B.F. Hobbs, B.M. Carolyn, J.S. Pang, Strategic gamming analysis for electric power systems: an MPEC approach. IEEE Trans. Power Syst. 15(2), 638–645 (2000)

    Article  Google Scholar 

  10. B.F. Hobbs, Linear complementarity models of Nash–Cournot competition in bilateral and PoolCo power markets. IEEE Trans. Power Syst. 16(2), 194–202 (2001)

    Article  Google Scholar 

  11. K.H. Lee, R. Baldick, Tuning of discretization in bimatrix game approach to power system market analysis. IEEE Trans. Power Syst. 18(2), 830–836 (2003)

    Article  Google Scholar 

  12. S. Soleymani, A.M. Ranjbar, A.R. Shirani, New approach for strategic bidding of Gencos in energy and spinning reserve markets. Energy Convers. Manag. 48, 2044–2052 (2007)

    Article  Google Scholar 

  13. I. Otero-Novas, C. Meseguer, C. Battle, J.J. Alba, A simulation model for a competitive generation market. IEEE Trans. Power Syst. 15, 250–256 (2000)

    Article  Google Scholar 

  14. R.W. Ferrero, S.M. Shahidehpour, V.C. Ramesh, Transaction analysis in deregulated power systems using game theory. IEEE Trans. Power Syst. 12(3), 1340–1347 (1997)

    Article  Google Scholar 

  15. B. Chatterjee, An optimization formulation to compute Nash Equilibrium in finite games, in International Conference on Methods and Models in Computer Science, (2009) pp. 174–178

Download references

Acknowledgments

The author acknowledges the support and encouragement extended to him by his organization. However, the views expressed in this paper are of the author in his individual capacity and not necessarily that of Transmission Corporation of Andhra Pradesh Limited of Andhra Pradesh.

Author information

Authors and Affiliations

  1. Power System Division, Transmission Corporation of Andhra Pradesh Limited, Secunderabad, 500 003, India

    P. V. Satyaramesh

Authors
  1. P. V. Satyaramesh
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to P. V. Satyaramesh.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Satyaramesh, P.V. A Bidding Methodology by Nash Equilibrium for Finite Generators Participating in Imperfect Electricity Markets. J. Inst. Eng. India Ser. B 95, 1–14 (2014). https://doi.org/10.1007/s40031-014-0077-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40031-014-0077-0

Keywords

Search

Navigation