Bi-Level Optimization Problem to Develop Optimal Strategy of a Generator in Competitive Environment

Abstract

A bi-level optimization approach has been proposed to develop the optimal strategy of a generator considering double sided market, congestion effect and rivals bidding strategy. Market clearing process of the System Operator is represented by lower level optimization problem and generator's profit maximization function is represented by upper level optimization problem, which is a nonlinear. Hence, optimal solution of the proposed bi-level optimization formulation has been obtained using Artificial Bee Colony algorithm. The effectiveness of the proposed method has been tested on 5-bus system. Results are compared with the Sequential Quadratic Programming based classical approach.