Full paper
Full paper

Offer Stack Optimization for Price Takers in Electricity Markets

P.J. Neame

Andrew Philpott

G. Pritchard


We consider a small  generator offering into an electricity spot market.  For a given time period, they must submit an offer stack, consisting of a finite number of quantity-price pairs (or tranches).  We assume that the generator is a price-taker -- that is, it cannot offer in enough power to substantially affect the market price.  We consider how to optimize the offer stack for various assumptions on the cost of production, and the probability distribution of the market price.