Using Eligibility Traces in Bidding Strategy of GENCOs in Spinning Reserve and Energy Markets for Different Market Allocation Models

In competitive environment of power industry, forming different markets, one of the important issues playing a key role in Generation Companies' (GENCOs) profitability, is bidding strategy. The bidding strategy means how the GENCO can earn the maximum profit through offering an appropriate price in a given period of time. Therefore, important discussions have been introduced in the market environment, such as design method, holding the tender offers and financial calculations. In such environment, GENCOs' behaviors and power markets conditions analysis through simulation can assist GENCOs and market counselors for proper designs and legislations before its implementation in a real-world environment. Paying attention to ancillary services market along with the energy market, in addition to providing the network security, make it possible to evaluate different tender offer implementation models in the market. In this paper, the effects of the energy and spinning reserve markets, in the forms of simultaneous and sequential allocation models on the GENCOs' profitability are evaluated. In this regard, GENCOs' bidding strategy using eligibility traces algorithm is investigated. In this algorithm, GENCOs as agents, through their interaction with the environment, learn to bid the price, such that they earn the maximum possible profit, in the long term.