A novel offering strategy to reduce profit risk

This paper presents a profit-maximising offering strategy for a price taker power producer participating in the day-ahead spot market as organised under the Power Exchange model. The offering strategy maximises profit by mitigating profit risk due to price forecast uncertainty and due to being accepted by the Market Operator (MO) to produce an infeasible dispatch schedule. The strategy makes use of a price forecast confidence interval to build hourly offer curves. The performance of the offering strategy is assessed using realistic price profiles. The case study is simulated using the agent-based OPTIMATE simulator. Comparison with a literature benchmark offering strategy indicates that the presented offering strategy achieves higher mean profit and reduced profit risk.