The idiosyncratic bidding strategies of electricity producers in Sicily and its impact on evaluating GHG emissions

Often studies on the impact of demand side management on GHG emissions assume that power plants respect the merit order when bidding on electricity markets. By analyzing bidding patterns in Sicily from 2006 to 2012 we show that this is not the case. Generators offer their production at prices ranging from zero upwards. Going further we estimate the GHG emissions of the power plants that were actually dispatched compared to those that would have been dispatched if producers respected the merit order rule. This highlights the need for in-depth studies of actual bidding strategies.