A Context-Based Fuzzy Model for a Generator Bidding System

This paper proposes a novel approach to strategic bidding in competitive electricity markets that applies a context-based fuzzy model to a generator bidding system. The proposed approach allows the user to modify the weights in the model according to the user’s perception of the criteria set in the context. In this approach, Dynamic Programming, which can handle an inter-period optimization of the dispatch of a generator, is applied to the developed fuzzy model to for- mulate a daily bid of a generator. Practical aspects of for- mulating the bid are discussed. In addition, the proposed approach is validated by applying it to a market model de- veloped on the market simulator. The performance of the proposed approach is compared to the performance of other techniques such as generic bidding strategies. The valida- tions show that the proposed approach has a significant ad- vantage over generic bidding strategies: it is able to identify a critical market condition where there is an incentive for a generator to exercise its market power