Abstract
The study introduces a two-step approach for creating profitable and operationally feasible hydropower bids in the day-ahead electricity market. The first step builds a wide range of realistic production profiles by solving a detailed short-term scheduling problem that reflects reservoir dynamics, water values, and turbine startup behavior. The second step evaluates these profiles under uncertain market prices and selects a limited set of mutually exclusive block bids that best balance expected revenue and operational cost. By separating profile generation from bid selection, the method keeps the problem computationally manageable while still capturing the physical and economic complexity of hydropower operation. Tests on a real Norwegian system indicate that the approach produces high-quality bids quickly and performs on par with a traditional hourly bidding model, but with far lower computational effort.