Evaluation of Market Rules Using a Multi-Agent System Method

The incentive announcement effect of demand response on market power mitigation in the electricity market

Bidding behaviors of GENCOs under bounded rationality with renewable energy

The optimization and simulation of power systems continues to be an area of concern for electricity companies and researchers worldwide namely considering the development of electricity markets and competition in the generation activity Therefore generation companies are devoting an increasing attention to market issues justifying the development of models to help them preparing bidding strategies to the day-ahead market. In this context, agent-based models have been reported as a complement to optimization and equilibrium models when the problem is too complex to be analyzed by traditional approaches. This paper details an Agent-Based Model for an electricity market considering a detailed modeling for hydro stations and presents some preliminary results taking the Iberian Electricity Market as an example.

This paper describes a new method for analyzing the bidding strategies of generating companies (GENCOs) in the independent system operator (ISO) point of view. ISO uses these results to detect the participants that have the potential for market power or actual exercise of market power. ISO models all GENCOs with perfect information. The proposed methodology uses the marginal cost of GENCOs as an initial point for bidding strategies of GENCOs and improves bidding strategies based on the objective function of GENCOs, the state of them in each hour of the day and with regard to ISO's market clearing problem. ISO tries to maximize the social welfare or minimize consumer's payments. The model presented in this paper simulates the energy market and the behavior of participants to obtain Nash equilibrium point of their bidding strategies for detecting the participants that have the potential for market power or actual exercise of market power. GAMS (general algebraic modeling system) language has been used to solve the profit maximization and social welfare maximization modules of this model using DICOPT optimization software with mixed integer non-linear programming.

In this paper, a novel conjectured supply function equilibrium (CSFE) based model is presented for simulating strategic interactions among generation companies (GenCos) in an electricity market under incomplete information. The model is derived theoretically from the well-acknowledged supply function equilibrium theory, and a general supply function for a GenCo is obtained based on its conjectural variation of the rivals' accumulated response to a change in the market price. The CSFE is a general and flexible model for simulating strategic behaviors of GenCos in an electricity market with inelastic demand. Supply functions will be linear when GenCos hold constant conjectures, and a unique equilibrium exists when linear supply functions are provided to the market. Finally, the IEEE 30-bus system is used to show the essential features of the proposed model.

In power systems, transmission network provides the infrastructure to support a competitive electricity market, but congestion occurs frequently in weakly connected networks. The definitions of the market power are presented from the views of economics and regulation. Bidding strategies, such as withholding capacity and bidding at higher price, are analyzed and the impacts of transmission congestion on the locational marginal price (LMP) are illustrated in detail. Congestion will cause relative scarcity of generating capacities in the congested areas, so generation companies in these areas have locational market power. Impacts of transmission congestion on market power are evaluated by an 8-bus system. The results indicate that transmission congestion can enhance the locational market power in the congested areas and weaken the efficiency of electricity market. So this study can provide a theoretical basis for stipulating market operation rules and supervising behaviors of market participants.

Electricity Derivatives and the Spot Market in Italy. Mitigating Market Power in the Electricity Market

In a deregulated market environment, the calculation of market power is one of the top priorities of the bodies involved in the market. The bodies generally involved such as the Generation companies (GENCOs), Distribution companies (DISCOs) look towards maximizing profit whereas the RTO/ISOs look to attain a zero market power environment. In this paper, Must Run Share and Nodal Must Run Share (NMRS) is used as an index to calculate market power. To focus upon the fast, accurate calculations and understanding the trends of market power under system changes such as various load conditions, transmission line outage and generator outage, Cubic's Spline Interpolation is used as a technique to interpolate between market powers calculated over a few operating condition set points. A demonstration of the employment of such a system is represented in this paper which will help in achieving the objectives of the players or firms involved in the electricity market. This system will be dynamic enough to suggest the operating conditions for a desired level of market power for any of the above named firms under unexpected system changes. The work is done on IEEE 14 bus test system on the MATLAB version R2012b.

SUMMARY Because of the oligopoly structure of the electricity markets, the Generation Companies (GenCos) may exert market power by using bidding strategies such as capacity withholding. This brings the market clearing price higher and the quantity generated of the market lower. In this article, capacity withholding in an oligopolistic electricity market in that all GenCos bid in the supply function equilibrium model is analyzed and the capacity withheld index, the capacity distortion index and the price distortion index are formulated. Demand elasticity and forward contracts can significantly affect the GenCos' capacity withholding in the market. The potential ability of market for capacity withholding is measured by the distortion–withheld index proposed in this article. The finding in this article is helpful for market power monitoring and mitigating. A two-settlement market including a forward market and a spot market is used to describe GenCos' strategic forward contracting and spot market competition. Copyright © 2012 John Wiley & Sons, Ltd.

An agent-based approach is proposed in this paper to analyze interactions between the emission and electricity markets. A cap-and-trade system is assumed to be in place to regulate emissions from power generation. Generation companies are modeled as adaptive learning agents that can bid strategically into the electricity market by Q-learning algorithm. These companies also participate in allowances trading in the emission market by adjusting their own allowances positions. In the simulation, generation companies can value their generation capacity and available allowances to maximize their profits. The results show that the initial allowance will influence the operation of power producers and that some generation companies may need to raise bid prices to recover their expenses for buying additional allowances. The results also reveal that in some cases generation companies may not increase profits by participating in both markets compared with bidding in the electricity market alone. This modeling framework can help design a sound emission market by simulating market scenarios with different policies, such as allowances caps. It can be also used to investigate the operation strategies for generation companies in such an environment.

Bidding modes for renewable energy considering electricity-carbon integrated market mechanism based on multi-agent hybrid game

The impacts of different bidding segment numbers on bidding strategies of generation companies

A risk-constrained generation asset scheduling model for generation companies (GENCOs) in the electricity markets is proposed in this paper. The model embodies the arbitrage opportunities for GENCOs through an optimization procedure. The risk exposure of GENCOs is managed by explicitly adding the downside risk constraints into the optimization problem. To avoid the inaccuracy of downside risk, the variance of expected profit is calculated to measure the fluctuation of GENCO's profit. The sensitivity of GENCOs' profit to risk is also calculated in the form of Sharpe ratio. The downside risk constraint will keep tightening iteratively until the risk exposure tolerance is satisfied. Consequently the profit and risk will be balanced automatically.

The development of restructuring has encouraged and brought up competitive markets in power systems. However, the exercise of market power evokes monopoly into the power system and tends to decrease competitiveness. This article assesses the market power of a generating company in a power system using must run indices and proposes a method to mitigate market power. Modified must run generation, must run share (MRS) and nodal must run share indices are used to quantify the market power of generating companies. Phase shifting transformers (PST) are installed in selected lines for mitigating the market power. Particle swarm optimization is used in the determination of must run indices and optimizing the angle of Phase Shifting Transformers. IEEE 14 bus test system is used to illustrate the proposed technique. The analysis also includes the impact of contingencies. Sensitivity analysis is performed to analyze the impact of phase shifting angle variation on MRS. The results clearly quantifies the market power of a generating company and show that the market power incurred by the generating companies can be minimized by installing PST with optimum phase shift angle.

In January 2017, The Government of Yunnan Province issued the implementation plan of electricity market reform for retail side. The electricity retail market has officially entered the stage of power market in Yunnan Province. The construction of power retail market is conducive to improving the activity of power market, cultivating the market awareness of power users, promoting power users to improve demand side management ability, and ensuring the safe, economic and efficient operation of power system. According to the official website of Kunming Power Exchange Center Company Limited, at present, there are 146 registered power sales companies and 33062 registered power users in Yunnan Province. The power market transactions are active, the transacted electricity quantity is increasing year by year, and the power retail market is booming. The retail package of electricity is the basis of mutual benefit and win-win between the electricity selling company and the retail users. The flexible, reasonable and effective electric retail package reflects the healthy and efficient operation of the electric retail market to a certain extent. Therefore, the research and development of electric power retail package is a very meaningful topic, which is worthy of in-depth study and practice.Firstly, based on the operation of Yunnan electric power wholesale market and electric power retail market, combined with the business practice of Yunnan electric power retail settlement payment, this paper points out the constraint boundary of the design of electric power retail package in electricity market of Yunnan province, such as the coupling constraints between electric power wholesale transaction and retail transaction, the coupling constraints between electric power wholesale settlement and retail settlement, etc. Then, combined with the characteristics of electricity load, electricity price bearing capacity, demand response and other characteristics, this paper makes a user portrait of Yunnan users, classifies and summarizes the power transaction demand of retail users, and designs the corresponding electric power retail package, such as free service, conditional service fee, price difference income, energy management and other electric power packages, which are full through the appropriate electric power retail package. It can meet the demand of electricity retail users and form a win-win situation. Secondly, this paper introduces the operation mode of all kinds of retail packages in Electricity Market of Yunnan province in detail. On the one hand, it is the business process of transaction and settlement, including the wholesale, retail transaction and settlement business process of power selling company, the transaction and settlement business process of power users, the transaction and settlement business organization flow of power exchange center et al. On the other hand, it is the cash flow and invoice flow of settlement and payment, including the cash flow and invoice flow of retail electricity payment of power users. Finally, through the practical analysis of the operation of power retail market in Yunnan province, it points out the advantages and disadvantages of various packages. Further combining with the construction and development plan of electricity market in Yunnan province, especially the operation of electric power spot market, some changes for the design of power retail package are proposed.