The Impact Of Transmission Charge On Pool-Based Electricity Market

The electric power industry has being experienced the reform from the traditionalmonopolistic regulation into the competitive supervising system in recent years. In thecontext of competitive electricity market, generators seek for their maximum profits onthe basis of market rules, thus the market rules play a crucial role that inducesgenerators' behaviors. The success of the reform finally depends on the electricity marketdesigning of market competition model. It is necessary to estimate the impact and predictrun-results of the market rules by some appropriate methods, in order to offer supports toestablish the proper market rules.The most traditional method to estimate the effect of the rules is to setup a gamemodel of electricity market and to ask for the market equilibrium state of the game model,so as to analyze the electricity market characteristics in the market equilibrium state. Theelectricity market shows typically oligarchical market at present, and generators possessof potential power market. Therefore generators' strategic behaviors should beconsidered during the evaluation of the electricity market rules. While the equilibrium ofthe game model in which involved restrictions of transmission grid is very difficult tocalculate. The agent-based simulation can perform a useful role for solving the problem.In this dissertation, an agent-based simulation model on generation side of thesingle-lateral auction market is developed. In the model, the electricity auction employsnodal price and transmission, while generators who are devoted by finitely rational andself-adaptive agents can learn to bid by using reinforced learning algorithm in repeatedbidding game to seek for their maximum profits, finally the market converges to theequilibrium state. The model-based simulation results are given, which show that themethod is effective to evaluate the impact of electricity market rules.The characteristics of this dissertation including:1. By using the agent-based simulation model, the simulation research on the impact oftransmission congestion with nodal pricing is performed. The results of researchshow that i) because of generators' behaviors for maximum profits, power flow oftransmission lines will distinctly change, so it is very difficult to exactly predict thecharacteristics of power flow in the context of competitive electricity markets by thetraditional estimation based on generation costs bidding;ii) generators can result inthe contrived congestion by their bidding strategies to gain excess market profits,whilst the sale/buy income of electricity with nodal pricing will increase with therealization of generators' market power;iii) using nodal pricing, the congestion oftransmission lines can induce the generators' profits increase, then the generators'market power will enlarge the case, so that the generators can utilize the transmissionlines restrictions to figure for more profits, in other words, the generators' marketpower is augmented by the transmission lines restrictions;iv) the power grid firmswill attain additional profits, therefore strict measures are necessary to prevent thepossible conniving action.2. By using the agent-based simulation model, the analysis on allocation oftransmission fixed costs is accomplished. The analysis results make it clear that i)the rules on allocation of the costs can really bring out the changes of generators'bidding strategies, and the changes become greater and greater with the transmissioncharge increasing. The agent-based simulation technology provides a properevaluation method, and the research based on the simulation case shows thesimulation results reveal the law and approve that the agent-based simulation is akind of appropriate tool to evaluate the markets characteristics. The characteristics ofgenerators' behaviors should be considered during the market rules designing andanalysis on allocation of transmission fixed costs, and so it is not appropriate toallocate transmission charge under the precondition of generation costs bidding;ii) iftransmission fixed costs are allocated by the embedded costs methods, such as thepower flow tracing method, the power flow of transmission grid in the equilibriumstate will be further distorted, because the generator' bidding strategies of this caseare different from those of nodal pricing in which only the transmission linesrestrictions are considered. In allocation by the embedded costs methods, especiallythe power flow tracing method, the more the transmission lines charge is, the less theutilization rate of these transmission lines is, so for guaranteeing the validity oftransmission investment programming, the impact of allocating the costs ongenerators' bidding strategies should be considered in the corresponding market rulesdesigning;iii) an advantage of allocation of transmission charge by postage stampmethod is that lines power flow does not change greatly compared with the linespower flow with nodal pricing. It can be believed that the short-run marginal costsdevoted by nodal pricing with the transmission fixed costs allocated by postagestamp method is a comparatively reasonable means, because the distortion of thelines power flow becomes less by postage stamp method than by the other embeddedcosts methods.