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In this paper, a day-ahead electricity market where multiple consumers and suppliers in several regions bid for per unit electricity price and ISO decides power disaptch and inter-regional power flow amount is considered. We show that if ISO maximizes the difference between payment from customers and payment to suppliers, then the social welfare will be maximized. Then, we propose an algorithm to solve the optimal power dispatch problem using dual decomposition. Finally, simulation results show the effectiveness of the proposed algorithm.

Optimization of Bidding Price and Power Dispatch in Electricity Market by Iterative Bidding