Strategic bidding in an energy brokerage

Abstract

This focus of this paper is to present a framework in which strategies may developed for the individual participants in an energy brokerage. Such a framework is expected to be important with the increasing interest in electricity market structures, such as the energy brokerage, that deregulation has produced. To illustrate the process of strategic bidding, a simple suboptimal bidding strategy is presented with the aid of a numerical example. The bidding strategy must be suboptimal because of the amount of unknown information about the other bidders. Further tuning of this strategy will be required before application to realistic scenarios.