Abstract:
In the competitive electricity market, Power Generation companies (GENCOs) and large
consumers are participating in bidding methodologies for their own benefits. In oligopoly market
structure, GENCOs tries to maximize their profit and minimize the risk factor. So it is very essential
and important for the GENCOs to formulate optimal bidding strategies before entering into the
electricity market to achieve a maximum profit , since the market clearing price (MRP) are variable in
nature.In this paper an innovative approach for defining optimal bidding strategy is presented as a
stochastic optimization problem and solved by Firefly algorithm.(FA). The Firefly Algorithm is a Meta
heuristic, nature inspired, optimization algorithm which is based on the social flashing behavior of
fireflies and has been introduced for the bidding problem to obtain the global optimal solution. The
proposed Firefly algorithm effectively maximizes the GENCOs profit. The proposed Firefly algorithm
effectively maximizes the GENCOs profit. A numerical example with six suppliers is considered to
illustrate the essential features of the proposed method and test results are tabulated. The
simulation result shows that these approaches effectively maximize the Profit of GENCOs, converge
much faster and more reliable when compared with existing methods.
