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Portfolio size’s effects on gains from coordinated bidding in electricity markets

A case study of a Norwegian hydropower producer

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Abstract

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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Notes

  1. Piecewise Cubic Hermite Interpolating Polynomial.

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Acknowledgements

We acknowledge the Research Council of Norway’s funding through Project 245284.

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Authors and Affiliations

  1. Norwegian University of Science and Technology, Trondheim, Norway

    Håkon Kongelf, Kristoffer Overrein, Gro Klæboe & Stein-Erik Fleten

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  1. Håkon Kongelf
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  2. Kristoffer Overrein
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  3. Gro Klæboe
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  4. Stein-Erik Fleten
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Correspondence to Håkon Kongelf.

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Kongelf, H., Overrein, K., Klæboe, G. et al. Portfolio size’s effects on gains from coordinated bidding in electricity markets. Energy Syst 10, 567–591 (2019). https://doi.org/10.1007/s12667-018-0294-8

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