Block bidding power markets

Most electric energy markets are auctioned by hourly bidding rule. In this paper, the shortcomings of the hourly bidding rule is studied first. The root of these shortcomings lies in the inconsistence of the bidding with the continuity features of electric energy production. Then the block bidding rule and the associated market scheme are presented. The basic idea of this scheme is that the market demand is to be divided into multiple blocks according to load levels. The loads in a block have the same duration time. The auction is performed for each block with an individual market clearing price. Comparing the characteristics of the two bidding rules, the paper reveals that the purchase cost for satisfying the demand in the market with the block bidding rule is lower than that with the hourly bidding rule. Furthermore, the paper indicates that the markets with the block bidding rule are more efficient than that with the hourly bidding rule. Besides, the proposed market scheme is more suitable for electric power production and more convenient for operating power markets.