designing an optimal linear bid function in a pay-as-bid electricity market

In this paper, bidding problem in electricity markets is formulated from the viewpoint of a generation company. with focus on iran's electricity market structure, the objective is to design an optimal linear bid function considering pay-as-bid pricing mechanism. the market clearing price is considered as a stochastic variable. the bidding problem is explained as a nonlinear optimization problem from the viewpoint of a price-taker generation company. then, a numerical study is performed to show the effect of stochastic characteristics of market price on the optimal values of bidding parameters. in order to have more expected profit, a mathematical problem is designed and solved to partition the generation capacity. an example is designed to calculate a linear bid function using the proposed technique. also a comparison between step-wise and linear bidding is presented.