Strategic Bidding Behavior Analysis with Truthfully Modeled Generator Output Range

As the foundation of the electricity market, the pricing scheme can affect the bidding behavior of market participants and thus determine the market clearing results. In this paper, we compare and analyze the characteristics of the strategic bidding behavior of generators and corresponding market clearing results with truthfully modeled generator output range under the pay-as-bid pricing scheme and locational marginal pricing scheme. First, we formulate the bi-level strategic bidding problems under two pricing schemes. Second, through the theoretical derivation, we show that the minimum output of the generator has a significant impact on the comparative conclusion between two pricing schemes, which is commonly neglected by existing studies. Then, considering the minimum output of the generator, the quantitative analysis of consumer payment and system operational cost under two pricing schemes is summarized. Finally, the numerical analysis shows some new insights about the comparative conclusion for two pricing schemes.