UNCERTAINTY QUANTIFICATION IN A MODEL ELECTRIC ENERGY BIDDING PROBLEM: A MULTI-CRITERIA DECISION MAKING APPROACH

This paper explores a wide range of different decision criteria for the bidding problem when severe uncertainty about inputs requires expressing them as bounded families of distributions. A GENCO maximizes its expected returns given its own risk profile and its percep- tion of market risks. This can be formulated as a multi- criteria optimization problem. The set of different decision criteria examined illustrates the variety of different ap- proaches possible, the different conclusions these ap- proaches produce, and the bidder's need to understand goals and information availability in order to rationally decide on a bid to best meet the goals of the organization. This paper highlights the different possible decision crite- ria and uses Analytic Hierarchy Process to determine the highest priority bid based on qualitative and quantitative analyses.