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(3) Theory of bilateral contract.
See Overview: Purchases Requiring a Bilateral Contract.
Some purchases require a bilateral contract.
In deregulated electricity markets, a Generation Company (Genco) has to optimally allocate their energy among different markets including spot, local and bilateral contract markets.
Moreover, in any bilateral contract the diminution of duties on one side effectively increases the duties on the other.
Examples are presented to illustrate the use of this formulation to minimize the cost of any bilateral contract to comply with the security requirements.
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Bilateral contracts.
A mathematical characterization of self-enforcing bilateral contracts is given.
The major electricity market models include: pools, bilateral contracts and hybrid models.
The hybrid model combines features of both pools and bilateral contracts.
In this way, market participants can enter into bilateral contracts to hedge against pool price volatility.
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