Strategic Bidding in Competitive Electricity Markets Moeljono Widjaja, Prof. R.E. Morrison and Dr. Ly Fie Sugianto Objectives To design a generator bidding system in competitive electricity markets from historical market data based on a fuzzy approach. To develop a systematic approach to formulate an optimal bidding curve ensuring positive earning. A Simplified Model of an Electricity Market A Four-Generator Two-Bus System Regional Load Profiles Marginal Bids of Generators (i.e. k=1) A bid multiplier k is defined as the multiplier to the marginal cost function and is used as the only bid variable. Regional load demands are modeled as stochastic processes. Generator A bids strategically while others bid at their marginal costs. A Fuzzy Model of Generator Bidding System Inputs: Forecasted Load Demand Generator’s Bid Output: Estimated Profit Projecting the Membership Function of Fuzzy Number Price Price as a function of Load. Price as a function of Bid. Price as a function of Load and Bid. Calculating the Parameters (mean and std) of the Gaussian-Type Membership Function of Fuzzy Number Price as a Function of Load and Bid. Fuzzy number Dispatch is formulated with the same approach as Price. Results and Discussion Generated Optimum Bid Profile for Generator A Histograms of the Daily Profits of Generator A The optimum bid multiplier of generator A is plotted against the load profile in region one. As the load increases, the spot price is likely to increase as well. However, when the load is large enough (i.e. the corresponding spot price is also high), there is an incentive for generator A to bid low and generate at its full capacity. Scenario one: generator A bids at its marginal cost. Scenario two: generator A bids strategically using the proposed fuzzy approach. Each scenario was simulated for 100 trading days where each trading day consisted 48 trading intervals. The results show that the proposed approach increased the daily profit of generator A by at least five percent on average. The proposed fuzzy-based approach is shown to be effective in formulating an optimal bidding curve for a generator in a competitive electricity market. Electrical and Computer Systems Engineering Postgraduate Student Research Forum 2001