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Simulations of the bidding strategies on the power market (Symulacje strategii wytwórców na rynku energii elektrycznej)

Author

Listed:
  • Magdalena Borgosz-Koczwara
  • Aleksander Weron
  • Agnieszka Wylomanska

Abstract

In this paper we apply a new approach to build bidding strategies for power suppliers on electricity market and assume that each supplier’s bid is a linear function. Moreover each supplier tends to maximise his profit and minimize his risk, which are dependent on the generation output, coefficients of bid function and cost function. Moreover, supplier’s profit is dependent on strategies of the other players. Therefore suppliers’ decisions are the subjects to expectations of the rivals’ bids and playing at electricity market is connected with the imperfect information about decisions of the rivals [1]. We extend the approach used in [4] and [7] and for some examples of load forecasting we obtain the optimal suppliers’ bids. The main results are illustrated by the numerical examples. To the analysis we use the real data from the Nord Pool power exchange.

Suggested Citation

  • Magdalena Borgosz-Koczwara & Aleksander Weron & Agnieszka Wylomanska, 2006. "Simulations of the bidding strategies on the power market (Symulacje strategii wytwórców na rynku energii elektrycznej)," HSC Research Reports HSC/06/04, Hugo Steinhaus Center, Wroclaw University of Technology.
  • Handle: RePEc:wuu:wpaper:hsc0604
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    File URL: http://www.im.pwr.wroc.pl/~hugo/RePEc/wuu/wpaper/HSC_06_04.pdf
    File Function: Draft version, December 2006
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    More about this item

    Keywords

    Power market; Nord Pool power market; bidding strategy; imperfect information; load forecasting;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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