December 2004
17
R. Rajaraman. “Optimal Bidding Strategies in Electricity Markets”
Optimal Bidding Strategy:
Correlated Prices, No Bid Restrictions
•
In period 1, bid 100 MW if price is LOW
but withhold everything if price is HIGH
Ø
That is, offer 100 MW at $20 but 0 MW at $30
•
•
In period 2, bid the remaining MW at less
than $15/MWh
Profit for this strategy is $3000