Strategic bidding in an energy brokerage

Abstract

Probability of forced outage of a unit Incomplete-Gamma function with parameter a Quantity or block of energy bought or sold (MWH) Arrow-Pratt index of absolute risk aversion Probability of acceptance of a bid expressed as a function of normalized bid price x xii Uiw) Utility function expressed as function of wealth w w Wealth (profit) resulting from a bid (S)

Cost analysis of reactive power support

“…References [16,171 give a detailed description on how to maximize the expected profit by using the strategic bidding strategy. The "market conditions" represent the probability distribution of market bid prices for real power and the incomplete beta distribution was recommended in [17]. This distribution was used in this paper to calculate the probablity of success, which is denoted by PRO in Equations ( 6 ) and (7).…”

Service identification and allocation in market-based power system operation

“…No single participant has the power to influence the prices and the marginal cost of production equals to the market price. However, in the actual energy markets and service markets that have come in to existence so far and appear to evolve in the near future, some barriers to entry and exit exist, as listed in Reference [9]. In addition, some participants may be able to influence prices if sufficient competition does not exist.…”

“…Because of various uncertainties, the bidding strategy should be used by individual participant to ma.ximize the profit. The strategy adopted in this research comes from the work of [9]. Although developing bidding strategy is not major part of this research, it might worth to include other strategies into the opportunity cost evaluation.…”