Electricity Trading for Profit Maximization in a Two Way Virtual Power Market

The main aim of this paper is to present the strategic bidding model of the virtual power market for profit maximization when both the market participants, i.e. suppliers and consumers, participate in the virtual bidding. Deregulation has led to the unbundling of various power system components. Each component works efficiently and competitively to maximize its interests. The presence of each participant is a must to give the market a balanced structure. Suppliers who urge to maximize their gains sometimes mark their bids above their original marginal price. Consumers, however, act in the other way and adjust their bids below the marginal cost. All of them make an effort to turn the market to their advantage. As a result, the market is steady despite being affected by two conflicting factors. A sample 3-bus system is considered for simulation studies in this paper. DC optimum power flow is employed to compute the locational marginal pricing and the load dispatch schedule at all the buses while satisfying equality and inequality constraints. This study proposes a bid modification strategy to maximize the profit in auctions, both suppliers and consumers, are present. Additionally, the impact of consumer participation on market clearing pricing and how it affects suppliers' bidding techniques are also covered in the study. The study results reveal that the participation of the consumers in the bidding process helps to balance the market, through overall reduction in the market clearing price.