Optimal control of nonlinear system for generator bidding in deregulated power markets

In this paper, considering generator's long-term optimization behavior, the generator bidding problem is studied using optimal control theory. In particular, the system demand is treated as a periodic function, and the competition process is then modeled as a dynamic, nonlinear and feedback system with periodic parameters, where the publicly known market clearing price (MCP) is the system output and the feedback signal, and supplier's outputs are the state variables. A software package MSIER3 for numerically solving the general optimal control problem is used for simulation. The performance of the optimal control is investigated, and a sensitivity analysis of system parameters is done through simulation.