Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/23629
Title: The impacts of different bidding segment numbers on bidding strategies of generation companies
Authors: Wang, L
Yu, CW
Wen, FS
Keywords: Bidding strategy
Electricity market
Marginal segment
Price-taker
Self-scheduling
Issue Date: 2008
Publisher: Elsevier
Source: Electric power systems research, 2008, v. 78, no. 3, p. 458-463 How to cite?
Journal: Electric power systems research 
Abstract: In a competitive electricity market, generation companies design bidding strategies to maximize their individual profits subject to the constraints imposed by bidding rules. For a generation company, obviously, the optimal bidding strategy and hence the potential of exercising market power may be different if different bidding rules are employed. Hence, a well-designed bidding protocol is vital to the effective and efficient operation of an electricity market. Based on the widely used stepwise bidding rules, the impacts of different numbers of bidding segments on the bidding strategies of generation companies are investigated. This study is focused on a price-taker generation company in an electricity market. A probabilisic model is used to simulate electricity price in the competitive market environment. With a given number of bidding segments, the optimal bidding strategy for a price-taker generation company is then developed. The effects of risk preferences as well as information asymmetry on the optimal bidding strategy are also examined. With particular references to the impacts of different numbers of bidding segments on the optimal bidding strategy, a numerical example is employed to demonstrate the validity of the proposed model and methodology.
URI: http://hdl.handle.net/10397/23629
ISSN: 0378-7796
EISSN: 1873-2046
DOI: 10.1016/j.epsr.2007.04.002
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