Optimal bidding strategy in a pool type electricity market using bacterial foraging algorithm

Abstract EN

In an electricity market generating companies and large consumers need suitable bidding models to maximize their profits.

Therefore, each supplier and large consumer will bid strategically for choosing the bidding coefficients to counter the competitors bidding strategy.

In this paper, bidding strategy problem is modeled as an optimization problem and solved using a novel algorithm based on Bacterial Foraging Algorithm (BFA).

BFA is an optimization algorithm inspired on bacteria moving in their environment looking for high-nutrient areas.

The BF strategy is based upon the fact of survival of species in any natural evolution process depends upon their fitness criteria, which relies upon their food searching and motile behavior.

Due to this it has better precise search which avoids premature convergence and always looking for the high-nutrient areas causes’ fast convergence.

Therefore the proposed method overcomes the short comings of selection of operators and premature convergence of Genetic Algorithm (GA) and Particle Swarm Optimization (PSO) method.

The proposed method tested with a numerical example consists of 6 suppliers and 2 large consumers.

The result shows that BFA takes less computational time and producing higher profits compared to GA and PSO.