A fuzzy-logic based bidding strategy for participants in the UK electricity market

This paper presents a novel methodology for the preparation of optimal bidding strategies by power suppliers in order to gain the maximum profits over a planning time horizon in the competitive UK electricity market. An algorithm for devising optimal bidding decisions has been successfully applied to the calculation of system transition probabilities and rewards. In this paper, the simulation of power system states using the data from the UKPX (UK Power Exchange) is analyzed based upon Markov theory. During the calculation of the probabilities associated with the bidding strategies adopted by rival market players, the number of the scenarios is huge and the calculation is complex. Fuzzy Set theory can provide optimum solutions with regard to aggregation in order to reduce the calculation required within algorithmic procedures. For this reason an improvement to the standard methodology using fuzzy membership functions and curves instead of the permutation and combination of the bidding scenarios has been proposed and developed to solve the complicated calculation. Case studies with six generation plants are presented in order to illustrate the feasibility of the proposed method.