Consider the case where there are four participants in the early years of the Syldavian Electricity Market(SEM), namely Alpha, Bravo, Champion, and Delta. Assume that the four-companies operate in SEM,and that an electronic trading system is used to set up bilateral transactions. In this early scheme, themarket operator acts as a broker and follows the scheme listed below to clear the transactions:
•Matches the highest offer with the lowest bid until there are no more bids or offers available.
• Calculates the transaction price ($/MWh) as the average of the offer price and the bid price for thespecific quantity.
•The settlement for each bilateral trade is then made at this transaction price.
The following bids and offers to sell and buy respectively were received at 3 pm on 12 January 2014.Offers (to
buy)
Quantity
MWh
Alpha
Alpha
Bravo
25
Bravo
25
Bravo
25
Champion
Champion
Delta
25
Market
Participa
nt
Bids (to sell)
Price
$/MWh
250
185
170
190
Quantity
MWh
25
25
25
25
–
Price
$/MWh
105
175
50
160
–
(a) (8 pts) Create a table similar to the one below and fill in the blanks with appropriate quantities
based on the settlement of transactions. Leave blank or add new lines, if necessary. Assume
unlimited transmission line capacity.
Transaction
Buy Price
$/MWh
Sell Price
$/MWh
Quantity
MWh
Transaction
Price ($/MWh)
________ buys from ________
________ buys from ________
________ buys from ________
________ buys from ________
________ buys from ________
(b) (8 pts) Determine the revenue and expense for each company for this hour.
