Multifractal behavior of Electricity Bid Price in Indian Energy Market

The bid price of power generation in a country is of extreme importance due to its obvious impact on the industry although it is difficult to explore correlation among cost of a product in any industry with fluctuations of biding price of power. This is due to the fact that the fluctuations are nonlinear and extremely complex. Recent years have witnessed the study of this type of complex systems with powerful tool involving fractal methodology. This paper reports for the first time in Indian scenario a study on the fluctuation pattern of biding price of power in five different bid areas of India with a robust and rigorous technique based on chaos and fractal behavior. The exhaustive study reveals very interesting patterns of the fluctuation process, namely in all domains, the fluctuations are multifractal in time and degree of multifractality is quite different in different zones. The data is completely new and has serious implications on product cost of industry and ultimately on stock price indices. The paper includes possible future applications including predictability of next day price.