Bidding of price taker power generators in the deregulated Turkish power market

Ahmet Yucekaya

Renewable and Sustainable Energy Reviews, 2013, vol. 22, issue C, 506-514

Abstract: In deregulated power markets, power firms bid into the day-ahead power market either with buy offers or sell offers. The auction mechanism and competition determine the equilibrium price and quantity for each hour. If the bid price of a company is below the market clearing price, then the offer of the company is accepted and rewarded with the market price. A company can be a price maker or price taker depending on the capacity it offers to the market. A price-taker unit must determine the right offer that will maximize their profit given price uncertainty and blind auction rules. This paper first examines power supply in the Turkish electricity market and bidding process. Then a marginal cost-based Monte Carlo method is developed to determine hourly and block bidding strategies of price taker units. Historical market prices are then implemented in a normal distribution to generate hourly price scenarios. A solution methodology is developed that maximizes the expected profit of each hourly and block bidding strategy over price scenarios. The generator is able to both evaluate the hourly bidding and block bidding strategies and find the best bidding strategy that will be submitted to the market using the proposed methodology. The model is illustrated for two coal units in Turkish power market and the results are presented.

Keywords: Price-taker bidding; Bidding into market; Monte Carlo simulation; Deregulation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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DOI: 10.1016/j.rser.2013.01.038

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