Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183598 
Year of Publication: 
2018
Series/Report no.: 
DIW Discussion Papers No. 1765
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
Short-term electricity markets are key to an efficient production by generation units. We develop a two-period model to assess different bidding formats to determine for each bidding format the optimal bidding strategy of competitive generators facing price-uncertainty. We compare the results for simple bidding, block bidding and multi-part bidding and find that even under optimal simple and block bidding generators face the risk of ex-post suboptimal solutions, whereas in multi-part bidding these do not occur. This points to efficiency gains of multi-part bidding in the presence of uncertainty in electricity markets.
Subjects: 
market design
electricity markets
bidding formats
auctions
JEL: 
D44
D47
Q48
L94
Document Type: 
Working Paper

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