Credit auction worked example: Hunter River Salinity Trading Scheme

Worked example of the credit allocation process.

Note: the tables below follow the bids from 2 bidders:

Bidder 103 is highlighted in mid-blue.
Bidder 105 is highlighted in green.

Fictional bid schedule

Table 1 shows a fictional bid schedule for a fictional credit auction for 50 credits using the Vickrey auction format. Noting the total number of credits sought exceeds the total number of credits available.

Note: This is a fictional example based on 50 credits. The Scheme credit auction will be for 200 credits.

The grey shading is to help identify bids by different bidders.

Table 1: Fictional bid schedule

Bidder ID	Quantity	Maximum $ per unit	Total number of bids sought	Total amount willing to pay
101	1	10,861
101	2	6,294	3	23,449
102	1	7,857
102	2	2,387	3	12,631
103	1	13,983
103	2	13,523
103	1	6,460
103	1	2,925	5	50,414
104	1	11,591
104	3	6,049	4	29,738
105	1	14,021
105	1	13,379
105	2	11,304
105	1	10,607
105	2	6,586
105	1	5,793
105	1	2,319
105	2	1,663	11	83,562
106	4	13,596
106	2	13,355
106	1	11,676
106	1	10,300
106	2	9,384
106	3	4,989
106	2	3,879
106	2	3,084	17	150,731
107	2	8,867
107	1	8,652
107	2	6,260
107	1	5,798	6	44,704
108	1	13,571
108	3	12,472
108	1	9,579
108	1	8,446
108	1	8,054
108	2	4,620	9	86,306
TOTAL			58	483,198

Ordering of individual bid values

Table 2 shows the individual bid values in order from highest value to lowest. It also indicates where the ‘highest losing bid’ occurs.

Table 2: Fictional individual bid values in order

Credit	Bidder ID	Maximum $ Per Unit
1	105	14,021
2	103	13,983
3	106	13,596
4	106	13,596
5	106	13,596
6	106	13,596
7	108	13,571
8	103	13,523
9	103	13,523
10	105	13,379
11	106	13,355
12	106	13,355
13	108	12,472
14	108	12,472
15	108	12,472
16	106	11,676
17	104	11,591
18	105	11,304
19	105	11,304
20	101	10,861
21	105	10,607
22	106	10,300
23	108	9,579
24	106	9,384
25	106	9,384
26	107	8,867
27	107	8,867
28	107	8,652
29	108	8,446
30	108	8,054
31	102	7,857
32	105	6,586
33	105	6,586
34	103	6,460
35	101	6,294
36	101	6,294
37	107	6,260
38	107	6,260
39	104	6,049
40	104	6,049
41	104	6,049
42	107	5,798
43	105	5,793
44	106	4,989
45	106	4,989
46	106	4,989
47	108	4,620
48	108	4,620
49	106	3,879
50	106	3,879
51	106	3,084 Highest losing bid
52	106	3,084
53	103	2,925
54	102	2,387
55	102	2,387
56	105	2,319
57	105	2,319
58	105	1,663

Bidder 103 and 105 allocations and payment calculations

Table 3 identifies the allocation and associated payment for Bidder 103 in the bid schedule.

Bidder 103 (highlighted in blue) was allocated 4 credits of their 5 bids. One bid was below the highest losing bid.

To calculate the amount to be paid, proceed to the highest losing bid in Table 3 and sum the bid values from credit 201 onwards, excluding any bids made by Bidder 103 for the price calculation. The amount to be paid is the sum of the values shown as bolded (i.e. credit 51, 52, 53 and 54). Bidder 103 is allocated four credits for the total price of $10,942.

Another example is given for Bidder 105 (highlighted in green) who was allocated 8 credits for the total price of $16,867. The allocation is carried out in the same manner. However, the difference is that for some of the credits, the reserve price is applied. In this fictional auction, the reserve price is set at $1,000. Bidder 105 obtained credits at bid prices set for credits 51-55 inclusive and the remaining 3 credits (to make up 8 successful bid values) were paid at reserve price of $1,000 per credit.

Table 3: Fictional auction results

Credit	Bidder ID	Maximum $ Per Unit
1	105	14,021
2	103	13,983
3	106	13,596
4	106	13,596
5	106	13,596
6	106	13,596
7	108	13,571
8	103	13,523
9	103	13,523
10	105	13,379
11	106	13,355
12	106	13,355
13	108	12,472
14	108	12,472
15	108	12,472
16	106	11,676
17	104	11,591
18	105	11,304
19	105	11,304
20	101	10,861
21	105	10,607
22	106	10,300
23	108	9,579
24	106	9,384
25	106	9,384
26	107	8,867
27	107	8,867
28	107	8,652
29	108	8,446
30	108	8,054
31	102	7,857
32	105	6,586
33	105	6,586
34	103	6,460
35	101	6,294
36	101	6,294
37	107	6,260
38	107	6,260
39	104	6,049
40	104	6,049
41	104	6,049
42	107	5,798
43	105	5,793
44	106	4,989
45	106	4,989
46	106	4,989
47	108	4,620
48	108	4,620
49	106	3,879
50	106	3,879
51	106	3,084 Highest losing bid
52	106	3,084
53	103	2,925
54	102	2,387
55	102	2,387
56	105	2,319
57	105	1,663
58	105	1,663
59	Reserve	1,000
60	Reserve	1,000
61	Reserve	1,000
62	Reserve	1,000
63	Reserve	1,000
64	Reserve	1,000
65	Reserve	1,000
66	Reserve	1,000
67	Reserve	1,000
68	Reserve	1,000

Overall fictional auction outcomes summary

Table 4 gives the allocations for all 8 bidders in the fictional auction.

Three bidders had some of their units allocated at the minimum (or reserve) bid price, because the available losing bids were exhausted before all of their units to be allocated could be priced.

Table 4: Fictional auction outcome summary

Bidder ID	Number of units allocated	Total payment amount ($)	Amount paid at the minimum (or reserve) bid price ($)
101	3	9,093	0
102	1	3,084	0
103	4	10,942	0
104	4	11,480	0
105	8	16,867	3,000
106	15	22,344	9,000
107	6	16,186
108	9	20,152	1,000
TOTAL	50	110,148	13,000

Updated 17 December 2025