Finding Nash Equilibrium Point for Optimal Bidding in PAB Electricity Markets Based on PSO Algorithm

In a deregulated electricity market with transmission constraints and limited number of producers, bidding strategy has become a major issue. In this market, each GenCo may increase its own profit through a favorable bidding strategy. This paper proposes a new method to obtain the Nash equilibrium points for optimal bidding strategy of GenCo's without the use of game theory. For this purpose, the first optimal bidding problem is modeled with two optimization sub-problem. In the first sub-problem, each GenCo maximizes its payoff and in the second sub-problem, a system dispatch will be accomplished. Then, particle swarm optimization (PSO) algorithm is used to find optimal bidding strategy of each GenCo in this method. finally, each GenCo update its optimal bidding strategy in terms of optimal bidding strategy of other GenCo's until Nash equilibrium points are obtained. The Western System Coordinating Council (WSCC) nine bus test system is used to illustrate the implementation of the proposed method for a typical power system. Copyright (C) 2011 Praise Worthy Prize S.r.l. - All rights reserved.