Day-ahead auction

A simulation of the power exchange. Everyone operates a power plant of 1 MW, submits a sealed bid in each round and learns after clearing whether it was accepted. Variable costs are drawn anew at random in every round.

The market clears the way an exchange does, following the merit order: the cheapest bids are accepted until demand is met. Every accepted bid receives the same price – that of the highest accepted bid (uniform pricing, marginal pricing). Profit arises when that price exceeds your own variable cost.