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Design of the incentive mechanism in electricity auction market based on the signaling game theory

journal contribution
posted on 2023-06-09, 12:16 authored by Zhen Liu, Xiliang Zhang, Jenny Lieu
At present, designing a proper bidding mechanism to decrease the generators’ market power is considered to be one of the key approaches to deepen the reform of the electricity market. Based on the signaling game theory, the paper analyzes the main electricity bidding mechanisms in the electricity auction markets and considers the degree of information disturbance as an important factor for evaluating bidding mechanisms. Under the above studies, an incentive electricity bidding mechanism defined as the Generator Semi-randomized Matching (GSM) mechanism is proposed. In order to verify the new bidding mechanism, this paper uses the Swarm platform to develop a simulation model based on the multi-agents. In the simulation model, the generators and purchasers use the partly superior study strategy to adjust their price and their electricity quantity. Then, the paper examines a simulation experiment of the GSM bidding mechanism and compares it to a simulation of the High-Low Matching (HLM) bidding mechanism. According to the simulation results, several conclusions can be drawn when comparing the proposed GSM bidding mechanism to the equilibrium state of HLM: the clearing price decreases, the total transaction volume increases, the profits of electricity generators decreases, and the overall benefits of purchasers increases.

History

Publication status

  • Published

File Version

  • Published version

Journal

Energy

ISSN

0360-5442

Publisher

Elsevier

Issue

4

Volume

35

Page range

1813-1819

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2018-02-20

First Compliant Deposit (FCD) Date

2018-02-20

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