Evaluation of Bilateral Transactions in Electricity Market

Abstract

Bilateral transactions are very crucial in electricity market environment because these contracts let two parties to have the price stability
and certainty necessary to perform long-term planning and to make rational and socially optimal investments. This paper deals with bilateral
transactions in electricity market and investigates the effects of bilateral transactions on the market performance. IEEE six-bus test system is
considered as test system and a bilateral between two parties is defined. Then, the effects of the proposed bilateral contract on the system
performance and locational marginal prices is simulated and studied. The simulation results show the great effect of bilateral transactions on the
performance of deregulated power system.