A Clearing Algorithm Of Electricity Markets Based On Block Bidding Model

In the electricity markets, the bidding algorithm is vital to the development of the electricity markets in that a proper bidding algorithm could not only embody fair, public rules, but also could effectively reduce the cost of electric energy in order to reduce the price of electric power. In this sense the theme of this paper is not only theoretically significant but also has much realistic value.First of all in this paper, the disadvantage of hourly bidding model is analyzed to illustrate the advantage of block bidding model. Subsequently, a clearing algorithm of electricity markets based on block bidding model is presented according to block bidding theory. In this algorithm load prediction curve is horizontally partitioned into three blocks: basic load block, intermediate load block and peak load block, and each generation company bids for the load in this very order, then each block's clearing price is shaped uniquely. This algorithm could effectively differentiate the quality of electric power and could be implemented in the measurement of electricity generated, meanwhile it is easy to be accepted because of the similarity to the traditional concept.Because of taking the units' constraints into account and the special management of hydroelectric units in view of the whole benefits, this algorithm could not only guarantee the hydroelectric energy is fully used but also could properly set the price of the hydroelectric power. In order to minimize the total cost of electric power, the dividing line between intermediate load block and peak load block is fixed by an optimization process and later unit recommitment is necessary to achieve the final optimizing results. The tested example suggests that this clearing algorithm could meet the network's operating conditions better and could assure cheaper prices of electric power, meanwhile the calculation is quite simple.