Profit Analysis and Optimization in a Deregulated Electricity Market Using DCOPF Based LMP

Electricity markets have progressively moved towards restructured and deregulated structures in order to enhance their efficiency that allows participants to make more profit. The deregulated electricity market requires a robust optimal power flow (OPF) tools that can provide convergence that makes the Independent System Operator (ISO) matching supply and demand bids and estimating the nodal prices. Power generation companies (GENCOs) bid energy to (ISO) to maximize their profits. The locational marginal pricing (LMP) is now the most common approach in electricity markets that determines the market prices. In addition, the DC optimal power flow (DCOPF) model has been used in power systems to determine LMPs, particularly in simulation and market planning due to its reliability and speed. This paper studies and analyses the profit of GENCOs in a perfectly competitive and oligopolistic pool electricity market with bidding strategy. DCOPF model is used in this paper to determine the LMPs using MATPOWER/MATLAB package applied on IEEE 14 bus and IEEE 30 bus systems.