Bidding strategies in electricity markets

In electricity markets organized as pools, electrical power producers provide offers (called sometimes bids) of power generation in defined price bands for every trading interval. Usually, the price offered reflects the variable cost of generation. Bidding behavior of market participants is determined by several factors. They include vesting and bilateral contracts, predicted demand, generation reserve, experience from the past and gaming attitudes. This paper analyses a typical bidding behavior of power generators in the Victorian and Australian national markets. Australia has a significant experience in designing of electricity market structures and construction of market simulators.