A Game Theoretic Approach in Bidding Strategy in Iran Wholesale Electricity Market

Abstract

In this paper, we consider bidding behavior of producers in wholesale electricity market in Iran. Participating in a day ahead pay-as-bid electricity auctions for Generator Companies with purpose of profit maximization in spite of market regulation constraints is taken into account. Since bidding functions are restricted to be stepwise with maximum of ten steps per unit in each hour, we ask whether increasing steps will improve the Ex Ante profit of firms or not. Finally, in order to evaluate rationalities in bidding behavior of the market participants, our results are compared with outcomes of real bidding data.