Development of a virtual power market model to investigate strategic and collusive behavior of market players

In this paper, a virtual power market model is proposed to investigate the behavior of power market players from regulator's point of view. In this approach, strategic players are modeled in a multi-agent environment. These agents which are virtual representative of actual players forecast the...

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Bibliographic Details
Published in:Energy policy Vol. 61; pp. 717 - 728
Main Authors: Shafie-khah, Miadreza, Parsa Moghaddam, Mohsen, Sheikh-El-Eslami, Mohamad Kazem
Format: Journal Article
Language:English
Published: Kidlington Elsevier Ltd 01.10.2013
Elsevier
Elsevier Science Ltd
Subjects:
Agency theory
algorithms
Applied sciences
Behavior
Behavior modification
Case studies
Collusion
Collusive behavior
Constraints
Decision-making
Economic data
Economic theory
Effectiveness studies
Electric energy
Electric power plants
Energy
Energy economics
Energy industry
Energy market
Energy policy
Energy prices
Exact sciences and technology
Game theory
General, economic and professional studies
Heuristic
Long term
market power
Markets
Methodology. Modelling
new markets
Power
Power plants
Prices
Regulation
Security
Strategic behavior
Virtual power market
Wind power
Collusive behavior
Virtual power market
Strategic behavior
Collusion
Electricity
Heuristic method
Markets
Regulation policy
Modeling
Game theory
Agent oriented
Firm strategy
ISSN:0301-4215, 1873-6777
Online Access:Get full text
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Summary:In this paper, a virtual power market model is proposed to investigate the behavior of power market players from regulator's point of view. In this approach, strategic players are modeled in a multi-agent environment. These agents which are virtual representative of actual players forecast the prices and participate in the markets, exactly the same as real world situation. In addition, the role of ISO is encountered by using security constraint unit commitment (SCUC) and security constraint economic dispatch (SCED) solutions. Moreover, the interaction between market players is modeled using a heuristic dynamic game theory algorithm based on the supply function equilibria (SFE). In addition to the collusive behavior, using the proposed model, the short-term strategic behavior of players, which their effects will appear in long-term, can be simulated. The proposed model enables the market regulators to make decision before implementing new market rules with the confidence of their results. To represent the effectiveness of the proposed method, a case study including wind power plants is considered and the impact of various market rules on players’ behavior is simulated and discussed. Numerical studies indicate that simulating the strategic and collusive behavior prior to any change in the market rules is necessary. •A virtual power market model is proposed using a heuristic dynamic game theory.•The proposed model can simulate the behavior of market players in a certain period.•This model can evaluate the oligopoly, collusive and strategic behavior of players.•The price uncertainty and security constraint are considered.•Neglecting strategic behavior of players can cause adverse consequences.
Bibliography:http://dx.doi.org/10.1016/j.enpol.2013.06.003
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ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2013.06.003