December 2004
15
R. Rajaraman. “Optimal Bidding Strategies in Electricity Markets”
Optimal Bidding Strategy:
Correlated Prices
•
In period 1, withhold all 100 MW
Ø
Equivalently, bid 100 MW at a price higher
than $30/MWh
•
•
In period 2, bid 100 MW at less than
$15/MWh
Expected profit for this strategy is $2750