Risk based Optimal Bidding Strategy for Suppliers and Buyers in a Day-Ahead Electricity Market

The deregulated market comprises of different participants such as suppliers/generation companies (GENCOs), buyers/distribution companies (DISCOs) faces many uncertainties which affect their transaction process. The GENCOs and DISCOs should bid with their appropriate bidding strategy to deal with the uncertainties. The deregulated electricity market consists of pay-as-bid and uniform pricing auction process. In this paper, appropriate bidding strategy is proposed for GENCOs and DISCOs to maximize their profit under uncertainties. The uncertainties considered are generator outages, lines outages, load variations and market prices volatility. Risks created due to the uncertainties has been analysed and a statistical parameter i.e. the confidence interval is used for the same. The GENCOs and DISCOs employ certain bidding strategy under the uncertainties. Risk is minimized by optimal placement of wind power producer (WPP) by accessing the confidence interval. The effects of WPP on the GENCOs and DISCOs in the auction process are also studied. The proposed methodology considers the modified IEEE 30 bus system to verify the effectiveness.