Optimal bidding strategy in a competitive electricity market using differential evolution

Abstract

In a competitive electricity market Generating Companies or suppliers participate in the bidding process in order to get maximum profit. Therefore, each supplier will bid strategically for choosing the bidding coefficients to counter the competitors bidding strategy. In this paper bidding strategy problem is modeled as an optimization problem and solved using a novel algorithm based on Differential Evolution (DE). It is a population based stochastic optimization algorithm that searches the solution space to find out the solution. It requires little or no tuning parameters and fast convergence. Due to this it had edge over Genetic Algorithm (GA) and Particle Swarm Optimization (PSO). The proposed method is numerically verified through computer simulations on IEEE 30-bus system consist of six suppliers, participated in the bidding process. The simulation result shows the effectiveness and robustness of the proposed method.