Optimal bidding strategy in spinning reserve market

In this paper, the problem of building the optimal bidding strategies for c ompetitive suppliers in the California-type spinning reserve market is addr essed. In this market, each supplier is required to submit a capacity bid a nd an energy bid simultaneously, and selection of spinning reserve supplier s is solely based on the capacity bids and the required spinning reserve am ount broadcast by the independent system operator (ISO). In this procedure, the uniform market clearing price rule is employed. Winners of capacity bi ds may be asked to provide energy in ISO's real time dispatch according to system operation requirements, and the dispatch of energy supply is based o n energy bids with application of the uniform market clearing price rule. I t is assumed that each supplier bids a linear capacity supply function and a linear energy supply function into the spinning reserve market, and each supplier chooses the coefficients in these. two supply functions to maximiz e benefits, subject to expectations about how rival suppliers will bid. A s tochastic optimization model is first developed to describe this problem, a nd a genetic algorithm based method is then employed to solve it, A numeric al example is utilized to illustrate the essential features of the method.