The Electricity Market Pricing Mechanism And Their Market Characteristics On The Game Equilibria

Because of that the electricity market is not provided with complete competition, there are not large numbers of generation companies and load demand almost is the price inelastic, the electricity market using marginal pricing method has shown two interrelated problems: the investment fade, the resever marginal descend and the generation company exercised their market power for their maximum benefit. So the various pricing method was developed for overcoming the electricity market morass, for example, the pay as bid (PAB) and the electricity value equivalent method (EVE) are the famous contestants.In this paper, the equilibrium market characteristic of the viouse electricity market pricing method was discussed. in general, the electricity market game must modeled and the game equilibrium is thinked as the outcome of the real market, anaysis the equilibrium to estimate the market characteristic. but the academic game theory has little capability of estimate the electricity as the electricity game is very complicated. So the Agent-Based Simulation Model was developed in this paper to estimate the market characteristics. In this model the generators learn bidding strategy using reinforcement learning algorithm in repeating bidding game to seek for their maximum profit. Using the model, the various electricity market pricing method was researched.First, the Uniform Clearing Pricing Method (UCP), the PAB pricing method and EVE pricing method which do not includ the transmission restriction was discussed. it is proved that the least cost line system in the EVE is the diagrammatic view of the K-T condition of economic schedule model's, that illuminate the the EVE's generation capacity compensate is based on margianl cost and through capacity cost Reference system. an agent-based simulation model of the UCP, PAB and EVE pricing method was employed to estimate their respective market characteristic. the result shown that the UCP can work in the course of nature only in the condition of unstinted reserve capacities (the reserve marginal no less than 10%) and large numbers of generation companies (the maximal firm share the 10% market quotient ). The PAB pricing method cannot restrain the generation firm's market power. Some time the market power in PAB auction may be higher than that in UCP auction. But, the auction using the EVE pricing method becomes robust, there exists small room for a power supplier to lift up the market price by his strategic bidding. And when there are economics of scale in generation market, EVE pricing method provides an intrinsic and reasonable mechanism to compensate the capapcity investment automatically. In this paper, the correlativity about the three pricing methods are discussed,...