December 2004

50
R. Rajaraman. “Optimal Bidding Strategies in Electricity Markets”
Optimal Bidding Strategy
•The optimal bidding strategy is a function of MW versus price, not just an expected value of the dispatch
ØThis takes full account of generator optionality
Ø
•This function depends on both the generator state and on exogenous prices
•
•The function must satisfy all market (bidding and other) rules
Ø3-part versus 1-part bids
ØSimultaneous versus sequential auctions