Using of a cost-based unit commitment algorithm to assist bidding strategy decisions

The paper describes a procedure developed to assist a generating company in choosing the most convenient bidding strategies for a day-ahead electricity energy market. According to the proposed method, the profit maximization problem is transformed into a minimization problem that can be solved by a traditional hydro-thermal unit commitment program after implementing a few modifications. The paper describes the modifications introduced in a unit commitment program based on the Lagrangian relaxation approach and on a disaggregated Bundle method for the solution of the dual problem. It also presents some results obtained for a realistic data set of hydro-thermal power plants. The results arc discussed in order to emphasize how the method can be applied to assess the bidding strategy choke of a given company.