Dynamic bidding analysis in power market based on the supply function

AbstractThis paper presents a dynamic bidding model of the power market based on the Nash equilibrium and a supply function. The new model is composed of different dynamic systems and semismooth equations by means of the nonlinear complementarity method. Comparing with those existing bidding models, the remarkable characteristic of the new model is twofold: First, it adopts a dynamic bid so that the bidding limit point is the Nash equilibrium point of the market; Second, it considers the system requirement and the market property such as involving the transmission constraints in the network, and using a supply function which is suitable for the oligopolistic competitive power market. All of these imply that the new model is very close to the practical power market. The computation of the dynamic model is discussed by using the semismooth theory. A numerical simulation is presented to test the model behaviors in the uncogestion and the congestion cases, respectively. The numerical tests include the computing behavior of the dynamic model to reach Nash equilibrium points, the influence of the adjusted parameters and the system parameters to the Nash equilibrium, the local stability of the model, and the comparison of simulation effect between the proposed model and the Cournot model. The simulations show that the new bidding model is valid