Research On Effective Bidding Mechanism For The Electricity Market Model Of Single Purchaser

Theoretical researches and operational experiences of electricity market have shown that neither the uniform price auction nor the pay-as-bid auction could motivate generation companies bidding according to their true cost. Therefore, it is necessary to design an effective bidding mechanism which could motivate generation companies bidding according to their true cost, to realize efficient allocation of power resources.In order to design the mechanism, based on the mechanism design theory and the effective competition theory, firstly, this paper analyzed the features of the effective bidding mechanism for the electricity market under single purchaser model. The features are as follows:meeting the constraints of incentive compatibility and individual rationality, stabilizing the market balance account and restraining generators'tacit collusion. And then, this paper proposed a program of restraining generators'tacit collusion by means of purchasing options, which makes the auction capacities of electricity variable. The pricing of the purchasing options was studied from the perspective of their value for avoiding risk of electricity price fluctuation, and the premium of unit quantity was given. Thirdly, according to generalized Vickrey auction theorem and the market model of single purchaser, this paper designed an incentive bidding mechanism that the scheduled capacity of a generation company is collectively decided by its bidding price and the clean price of the market, meanwhile the settle price is decided by certain rules of this mechanism and the conditions of the market balance account. Finally, whether the mechanism satisfied the constraints of incentive compatibility and individual rationality or the constraint of stabilizing the market balance account or restraining generators'tacit collusion were examed.