Comparison of block bidding and hourly bidding based on case study

Hourly bidding is the widely used bidding mechanism in present power markets, by which load demand is divided and auctioned hour by hour (or half hour by half hour) to form the spot price. However, this bidding mechanism has some shortcomings, such as uncertainty, randomness of unit commitment and price spikes, because of its inconsistence with the continuity features of electric energy production. Block bidding is a new bidding mechanism in which demand load are divided into multiple blocks with continuous segments and the auction is performed for each block. In this paper, market rules and models for block bidding are introduced. With these rules, it is convenient for power supplies to determine unit operation and make bidding decisions; also, it is convenient for market operating. Based on IEEE-RTS data, hourly bidding and block bidding are compared. Results show that Block Bidding is a suitable and simple bidding mechanism for power auction. Furthermore, as contrast with hourly bidding, block bidding gains a large payment savings and. makes the market more efficient.