Double Sided Bidding Strategy in a Day-Ahead Electricity Market

Abstract

A double-sided strategic bidding problem is projected in the developing electricity market as a multi objective difficulty. The most important aim of this paper is to identify optimal values of bidding coefficients for sellers and buyers of electrical energy to optimize their remuneration in terms of overall profit. When both sellers and buyers of electrical energy are involved in a double-sided bid procedure to maximize their profits, the issue becomes a multi-goal in which two goals are simultaneously optimized. Therefore, in this work, problem of profit maximization of both entities is included as a complex multi-objective problem and solved by a new hybrid solution, it relies on a correspondence to the form of ideal solution (TOPSIS) coupled with a algorithm for gravitational exploration (GSA). The TOPSIS method uses Euclidean geometry to provide a standardized outcome distribution for multi-objective optimization issues and can be used in combination with any recent form of heuristic optimization to choose the best compromising result. The proposed methodology is productively implemented on the system having six electrical energy sellers and two large buyers participating in a single hour trading period. Results obtained using TGSA provide a superior result in terms of higher profits / benefits than other methods like Monte Carlo. The comparison suggests that the TGSA approach is effective and may be a useful tool in multi-objective bidding procedure in day-ahead market for maximizing social welfare.