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

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  • Yucekaya, Ahmet

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.

Suggested Citation

  • Yucekaya, Ahmet, 2013. "Bidding of price taker power generators in the deregulated Turkish power market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 506-514.
    • Handle: RePEc:eee:rensus:v:22:y:2013:i:c:p:506-514
    DOI: 10.1016/j.rser.2013.01.038
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    References listed on IDEAS

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    1. Al-Sunaidy, A. & Green, R., 2006. "Electricity deregulation in OECD (Organization for Economic Cooperation and Development) countries," Energy, Elsevier, vol. 31(6), pages 769-787.
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    1. Alipour, Manijeh & Zare, Kazem & Mohammadi-Ivatloo, Behnam, 2016. "Optimal risk-constrained participation of industrial cogeneration systems in the day-ahead energy markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 421-432.
    2. Palani, Velmurugan & Vedavalli, S.P. & Veeramani, Vasan Prabhu & Sridharan, S., 2022. "Optimal operation of residential energy Hubs include Hybrid electric vehicle & Heat storage system by considering uncertainties of electricity price and renewable energy," Energy, Elsevier, vol. 261(PA).
    3. Abiodun, Kehinde & Hood, Karoline & Cox, John L. & Newman, Alexandra M. & Zolan, Alex J., 2023. "The value of concentrating solar power in ancillary services markets," Applied Energy, Elsevier, vol. 334(C).
    4. Yucekaya, A., 2022. "Electricity trading for coal-fired power plants in Turkish power market considering uncertainty in spot, derivatives and bilateral contract market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    5. Bakke, Ida & Fleten, Stein-Erik & Hagfors, Lars Ivar & Hagspiel, Verena & Norheim, Beate, 2016. "Investment in mutually exclusive transmission projects under policy uncertainty," Journal of Commodity Markets, Elsevier, vol. 3(1), pages 54-69.

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