Why offer curves of a power plant are stepwise increasing? I was wondering why the supply curve of a power plant in the auction for the Day-Ahead Market is stepwise increasing and not a continuous function with first and second derivative strictly positive.
I am thinking of a gas plant (CCGT), the amount of fuel to be used can be adjusted continuously and not discretely, am I wrong?
One minor point- it could be that the factory schedules labor and other factors of production (coal deliveries, etc) in daily increments, and therefore pricing is fixed within each increment.