December 2004

9
R. Rajaraman. “Optimal Bidding Strategies in Electricity Markets”
Energy-Limited Generators
•Limited energy (MWh) over multiple periods
•
•If you have perfect energy price forecast, then
ØThe highest valued period gets the most energy, followed by the second highest period, etc.
•
•If you have an uncertain energy price forecast
ØIt depends on how you model the uncertainty!
ØIf prices are high today, you may withhold under certain price scenarios  (“optionality” feature)