Game-Theoretic Optimization of Bilateral Contract Transaction for Generation Companies and Large Consumers with Incomplete Information

Bilateral contract transaction among generation companies and large consumers is attracting much attention in the electricity market. A large consumer can purchase energy from generation companies directly under a bilateral contract, which can guarantee the economic interests of both sides. However, in pursuit of more profit, the competitions in the transaction exist not only between the company side and the consumer side, but also among generation companies. In order to maximize its profit, each company needs to optimize bidding price to attract large consumers. In this paper, a master–slave game is proposed to describe the competitions among generation companies and large consumers. Furthermore, a Bayesian game approach is formulated to describe the competitions among generation companies considering the incomplete information. In the model, the goal of each company is to determine the optimal bidding price with Bayesian game; and based on the bidding price provided by companies and the predicted spot price, large consumers decide their personnel purchase strategy to minimize their cost. Simulation results show that each participant in the transaction can benefit from the proposed game.