Abstract
With the development of restructured power markets, the profit-making competitive business environment has emerged. With the help of different advanced technologies, generating companies are taking decisions regarding trading electricity with imperfect information about marketing operating conditions. The forecasting of the market clearing price (MCP) is a potential issue in these markets. Early information on the MCP can be a proven beneficial tool for accumulating profit. In this work, a local grey prediction model based on a cubic polynomial function is presented to estimate the MCP with the help of historical data. The mathematical framework of this grey model was established and evaluated for different market conditions and databases. The comparison between traditional grey models and some advanced grey models reveals that the proposed model yields accurate results.