Portfolio size’s effects on gains from coordinated bidding in electricity markets: A case study of a Norwegian hydropower producer

This paper considers gains from coordinated bidding strategies in multiple electricity markets. The gain is quantified by comparing profits from coordinated bidding to profits from a purely sequential bidding strategy. We investigate the effect of the production portfolio size on gains. We formulate...

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Published in:Energy systems (Berlin. Periodical) 2019-08, Vol.10 (3), p.567-591
Main Authors: Kongelf, Håkon, Overrein, Kristoffer, Klæboe, Gro, Fleten, Stein-Erik
Format: Article
Language:English
Subjects:
Economics and Management
Energy
Energy Policy
Energy Systems
Operations Research/Decision Theory
Optimization
Original Paper
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container_title Energy systems (Berlin. Periodical)
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creator Kongelf, Håkon
Overrein, Kristoffer
Klæboe, Gro
Fleten, Stein-Erik
description This paper considers gains from coordinated bidding strategies in multiple electricity markets. The gain is quantified by comparing profits from coordinated bidding to profits from a purely sequential bidding strategy. We investigate the effect of the production portfolio size on gains. We formulate a coordinated planning problem for a hydropower producer using stochastic mixed-integer programming. A comprehensive scenario-generation methodology is proposed. An extensive case study of the current Nordic market is carried out. Under the current Nordic market conditions, we found that gains from coordinating bids are very moderate, just below 1% in total profits for one watercourse, and about 0.5% for two and three watercourses. Gains from coordinated bidding decline with portfolio size, but only to a certain degree, because the gains seem to stabilise at a certain level.
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subjects Economics and Management
Energy
Energy Policy
Energy Systems
Operations Research/Decision Theory
Optimization
Original Paper
title Portfolio size’s effects on gains from coordinated bidding in electricity markets: A case study of a Norwegian hydropower producer
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