Modern electricity markets conduct a two-settlement procedure. Ahead of time, they allocate definite supply as well as reserves. Close to the time of consumption, they balance supply and demand. Bidding in these two auctions poses a challenge for automated bidding by agents, which will be more common in future electricity markets and so-called “smart grids”. In a decision-theoretic model, we implement the current bidding practice that uses two independent bids and a novel, unified format that simplifies computation. We show through Monte-Carlo simulations in one-shot settings that the unified format restricts market power of suppliers in exploitable settings, and is also less vulnerable to uncertainty of bidders about market outcomes.
Additional Metadata
Keywords Power System Economics, Electronic Commerce, Smart Grids I.
THEME Software (theme 1), Logistics (theme 3), Energy (theme 4), Software (theme 1), Logistics (theme 3), Energy (theme 4)
Publisher IEEE
Editor L. O’Conner
Persistent URL dx.doi.org/10.1109/WI-IAT.2012.168
Project Intelligent en Decentraal management van netwerken en data
Conference IEEE/WIC/ACM International Conference on Intelligent Agent Technology
Citation
Höning, N.F, & La Poutré, J.A. (2012). Reduction of Market Power and Stabilisation of Outcomes in a Novel and Simplified Two-Settlement Electricity Market. In L O’Conner (Ed.), Proceedings of IEEE/WIC/ACM International Conference on Intelligent Agent Technology 2012. IEEE. doi:10.1109/WI-IAT.2012.168