An Introduction to Electricity Market Auctions Using a Spreadsheet

This paper presents a spreadsheet model of an electricity market that can be used to simulate two types of auctions, a single price auction and a paid your bid auction. This model can be used in a variety of pedagogical applications. From the perspective of management science and operations research (MS/OR), this application emphasizes model use and integrates several important concepts. From a business perspective, users can explore various bidding strategies and their implications, depending on the auction rules. From a public policy perspective, students can learn how market design decisions may influence market outcomes and the exercise of market power.