Strategic Bidding in Electricity Markets with Convexified AC Market Clearing Process.

This paper presents a framework to solve the strategic bidding problem of participants in an electricity market cleared by employing the full AC Optimal Power Flow (ACOPF) problem formulation. Traditionally, the independent system operators (ISOs) leveraged DC Optimal Power Flow (DCOPF) problem formulation to settle the electricity market. The main quest of this work is to find what would be the challenges and opportunities if ISOs leverage the full ACOPF as the Market Clearing Problem (MCP) instead of the current practice of using the DC form? With the recent advancements in solving the ACOPF problem, the settlement of the market with ACOPF problem formulation is inevitable. This paper aims to present mathematical programming with equilibrium constraints to maximize the profit of participants via strategic bidding. The equilibrium constraints are procured by presenting the dual form of the relaxed ACOPF problem. Several analyses are presented to address the challenges in the coupling of real and reactive power dispatch of generation unit constraints, ramping constraints, demand response implications with curtailable and time shiftable loads, and AC line flow constraints. In the case study, the merit of the presented strategic bidding problem with AC constraints is compared with the one with DC constraints.