Particle Swarm Based Optimal Estimation of Block Incremental Cost Curve

Competitive electricity market (EM) requires the bid from the electricity supply companies in the required formats which are defined in the market regulations. Block (stair-case) bid and linear bid are two most commonly used bid format for both market and research purposes. In most of the EM, the generating companies (so called energy suppliers) are required to bid their power outputs in blocks with the associated price of each block. For a unit having with multiple fuel and valve point loading effect, the generating company must divide the output power of the unit into the blocks so that it can be bid into the electricity market with and/or without gaming. This paper addresses the estimation of optimal block incremental cost from the instantaneous incremental heat rate curve of a generating unit using particle swarm optimization approach. During each block, the total cost is the same to the cost obtained with the instantaneous incremental cost curve. The formulation is simple and can be used for any generating unit with minimum error at block edges. The effectiveness of the proposed method is illustrated with the case studies.