Designing Optimal Bidding Curve in Electricity Pay-as-Bid Markets

Regarding the importance of the strategic bidding problem in wholesale energy markets, a method is proposed to design the optimal piece-wise bid function from the viewpoint ofa generation company. In this paper, the bidding problem is formulated, assuming the market clearing price as a stochasticvariable. The method is used to calculate the optimal bidding curve. A simple example is presented to show the technique of the paper.