Abstract
This paper proposes an algorithm to simulate the transactions that take place in a free market of electricity. The algorithm presented is used for Bilateral Transaction Matrix (BTM) creation assuming that a day ahead load forecast is previously known. Bids can be made by both the generation side and the demand side to determine transaction prices, then the algorithm allocates the transactions according to market rules until the demand is satisfied. This creates feasible BTMs that can be used to study system security and to find future methods to regulate bilateral transactions through market mechanisms like the application of penalties to the transactions that affect the system’s security. Results show that the proposed algorithm is a good option for electricity market analysis. The proposed algorithm provides system planners with a practical tool for data creation to further study the effects of bilateral transactions in a deregulated electricity market.
