Electricity Trading Bid Optimization via Dynamic Market Segmentation
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Existing methods for formulating commodity portfolios for financial products, such as electricity trading, are ineffective for short-term transactions due to assumptions of long-term holdings, which do not align with the nature of electricity trading where products cannot be stored and are suitable only for short-term transactions.
Innovation Solution
An information processing apparatus that extracts similar instance data from past transaction results, calculates profit based on temporary bid contents, and determines risk/return indicators to support transactions in electricity trading markets by optimizing bid volume ratios between different market types.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If long-term holding period is assumed for portfolio formulation, then risk/return indicators can be calculated using existing methods, but the method cannot exhibit sufficient effect for short-term tradable products like electricity
Solution Approach 1:
The patent changes the time parameter from long-term to short-term holding periods, adapting the portfolio formulation method specifically for electricity trading where products cannot be stored. This parameter change enables the method to work effectively for short-term transactions by adjusting the calculation framework to account for immediate or near-term trading horizons rather than long-term investment periods
Solution Approach 2:
The patent introduces dynamic bid volume ratios that can be adjusted between different market types (first-class and second-class markets) based on real-time conditions. This dynamic approach allows the portfolio formulation to adapt to changing market conditions in short-term electricity trading, rather than relying on static long-term holding assumptions
2Stability of the object's composition
If bid volume ratios are optimized for long-term holdings, then portfolio stability is improved, but adaptability to short-term market conditions deteriorates
Solution Approach 1:
The patent implements dynamic bid volume ratios that can flexibly adjust between first-class and second-class markets based on current market conditions, product types, and trading strategies. This dynamic mechanism maintains portfolio stability through systematic allocation while simultaneously adapting to short-term market fluctuations and opportunities in electricity trading
Solution Approach 2:
The patent segments the portfolio into different bid volume ratios for different market types (first-class market and second-class market). This segmentation allows each market segment to be optimized independently according to its specific characteristics and short-term conditions, while maintaining overall portfolio stability through coordinated allocation across segments
Data Source
Figure 1
Figure 2
Figure 3
AI summary
An information processing apparatus includes a similar instance data extraction part that extracts similar instance data from past transaction result data, a profit calculation part that calculates a profit on an assumption that a bid is made in a first-class market with temporarily determined bid contents, and an indicator calculation part that calculates an indicator indicating a degree of risk and return based on the profit calculated and the similar instance data.