Price-region bids in electricity markets

Lucien Bobo, Lesia Mitridati, Josh A. Taylor, Pierre Pinson, Jalal Kazempour

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


Current bid formats in pool-based electricity markets are ill-equipped to accommodate the broad range of non-conventional sources of flexibility, such as demand response and interconnected heating, natural gas and water infrastructure networks. To address this issue, this paper introduces the novel price-region bid format to be used in both forward electricity markets and financial right auctions. We show that price-region bids are able to accommodate a broad range of techno-economic characteristics, including complex spatial and temporal couplings, and facilitate market access to non-conventional flexibility providers. We then show that this new bid format is compatible with existing market structures, and satisfies desirable market properties under common assumptions. Three numerical studies are provided: two motivating examples based on a district heating utility and a cascaded hydro power plant, and a case study based on an integrated power and heat system. These studies illustrate the inability of existing bid formats to accommodate flexible resources, and show how price-region bids overcome this shortcoming.

Original languageEnglish (US)
Pages (from-to)1056-1073
Number of pages18
JournalEuropean Journal of Operational Research
Issue number3
StatePublished - Dec 16 2021
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Computer Science
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management


  • Electricity markets
  • OR in energy
  • Power system flexibility
  • Price-region bids


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