Value of price dependent bidding for thermal power producers

Author

Rudlang, Erik B. ; Tjeransen, Carl Fredrik ; Fleten, Stein-Erik ; Klaboe, Gro

Author_Institution

Dept. of Ind. Econ. & Technol. Manage., Norwegian Univ. of Sci. & Technol., Trondheim, Norway

fYear

2014

fDate

28-30 May 2014

Firstpage

1

Lastpage

5

Abstract

The steady increase in the short-term trading of electricity through power exchanges has made the investigation of appropriate bidding strategies relevant. The goal of this paper is to quantify the difference between price-dependent and price-independent bidding strategies for thermal power producers. The two bidding strategies are evaluated for trading in the German-Austrian day ahead market. Optimal bidding decisions are found through two stochastic optimization models. The results indicate that the price-dependent bids outperform the price-independent bids by utilizing the flexibility in the generators to increase production in the case of price peaks and reduce production for price drops.

Keywords

optimisation; power markets; pricing; thermal power stations; German-Austrian day ahead market; bidding strategies; optimal bidding decisions; price dependent bidding; price-dependent bidding strategies; price-independent bidding strategies; short-term electricity trading; stochastic optimization models; thermal power producers; Electricity; Generators; Indexes; Mathematical model; Optimization; Production; Stochastic processes; Bidding behavior; Day ahead markets; Electricity supply industry; Power markets; Stochastic programming;

fLanguage

English

Publisher

ieee

Conference_Titel

European Energy Market (EEM), 2014 11th International Conference on the

Conference_Location

Krakow

Type

conf

DOI

10.1109/EEM.2014.6861245

Filename

6861245