Convergence bidding, has been adopted in recent years by most Independent System Operators (ISOs) in the United States as a relatively new market mechanism to enhance market efficiency. Convergence bidding affects many aspects of the operation of the electricity markets and there is currently a gap in the literature on understanding how the market participants strategically select their convergence bids in practice. To address this open Problem, in this paper, we study three years of real-world market data from the California ISO energy market. First, we provide a data - driven overview of all submitted convergence bids (CBs) and analyze the performance of each individual convergence bidder based on the number of their submitted CBs, the number of locations that they placed the CBs, the percentage of submitted supply or demand and CBs, the amount of cleared CBs, and their gained profit or loss. Next, we scrutinize the bidding strategies of the 13 largest market players that account for 75 % of all CBs in. the California ISO market. We identify quantitative features to characterize and distinguish their different convergence bidding strategies. This analysis results in revealing three different classes of CB strategies that are used in practice. We identifymore »
Competitive Bidding Strategies for Online Linear Optimization with Inventory Management Constraints
This paper develops competitive bidding strategies for an online linear optimization problem with inventory management constraints in both cost minimization and profit maximization settings. In the minimization problem, a decision maker should satisfy its time-varying demand by either purchasing units of an asset from the market or producing them from a local inventory with limited capacity. In the maximization problem, a decision maker has a time-varying supply of an asset that may be sold to the market or stored in the inventory to be sold later. In both settings, the market price is unknown in each timeslot and the decision maker can submit a finite number of bids to buy/sell the asset. Once all bids have been submitted, the market price clears and the amount bought/sold is determined based on the clearing price and submitted bids. From this setup, the decision maker must minimize/maximize their cost/profit in the market, while also devising a bidding strategy in the face of an unknown clearing price. We propose DEMBID and SUPBID, two competitive bidding strategies for these online linear optimization problems with inventory management constraints for the minimization and maximization setting respectively. We then analyze the competitive ratios of the proposed algorithms and more »
- Publication Date:
- NSF-PAR ID:
- 10346192
- Journal Name:
- ACM SIGMETRICS Performance Evaluation Review
- Volume:
- 49
- Issue:
- 3
- Page Range or eLocation-ID:
- 6 to 7
- ISSN:
- 0163-5999
- Sponsoring Org:
- National Science Foundation
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Accepted Manuscript1.0
- Publisher's Version of Record
- https://doi.org/10.1145/3529113.3529115
