December 2004

20
R. Rajaraman. “Optimal Bidding Strategies in Electricity Markets”
Example 3: Generator Parameters
•Generator’s incremental cost is $30/MWh
•
•Generator can offer up to 100 MWh energy and up to 40 MW/h reserves,
ØBut energy + reserves ≤ 100
•
•Energy price can be either $40 or $35 with equal probability
Ø
•Reserve price can be either $12 or $4 with equal probability