Study On Strategic Bidding Behavior Of Generation Companies In Electricity Markets

Since the late 20 century ,a surge of electricity market reform has set off all around the world.The basic thought is to shift power industry from the traditional type of monopoly regulation to the type of competitive supervision, liberating regulation,introducing competition and improving operation efficiency of power field.In general, the reform has made a great achievement,but there are still some probloms.In the electricity market ,the particularity of power system and incomplete information under the market environment inspire the generator companies seeking all kinds of tactics for more profits,which brings the sharp fluctuation of market price,affects the sercurity and economy of market operation and results in the failure to optimize the allocation of resources.Therefore,the study on features of strategic bidding behavior of generator companies and the measures of precaution and restraint has a magnificent theoretic and practical importance on electricity market.The paper is aiming at strategic bidding behavior that generator companies make use of market power in electricity market. It concentrates on the following aspects:â—‹1 . Model research on strategic bidding behavior of generator companies. Realizing the restraint of strategic bidding behavior of generator companies needs to study its behavior features.It includs building the models of strategic bidding behavior of generator companies, analysing the kinds, the forms, the influence factors and the implement conditions of strategic bidding behavior of generator companies in detail.â—‹2 . The mechanism analysis of the soaring prices of electricity induced by the strategic bidding behavior of gegerator companies. The bidding process of electricity market is a repeated game process, so the generator companies quote repeatedly day after day, and form a kind of tacit collusion. The collusion based on the establishment of the strategic bidding behavior of genetator companies is the main approach that generator companies carry out the market power. On the basis of the above, the paper further analyzes the reason of the soaring price in electricity market caused by tacit collusion based on the strategic bidding behavior of generator companies, and proves the existence of the phenomenon through some early service data from Zhejiang electricity market.â—‹3 . Restraint study of strategic bidding behavior of generator companies. The paper is target to the features of strategic bidding behavior of generator companies in electricity market, and applies the mechanism design theory. On the basis of incentive electricity market bidding model offered by our predecessors, it combines pay-as-bidding mechanism, improves the original model, introduces new variable to resolve the problem that the model is hard to put into operation, and forms a kind of new incentive electricity market bidding model. The paper further considers the influence of network constraints on incentive electricity market bidding model. Proved through a mathematical process, the model can guide the generator companies quoting according to marginal cost, thus eliminate unhealthy strategic bidding behavior and ensure the stable operation of electricity market. The feasibility and validity was been verified through examples analysis.In the last part, the paper makes a brief conclusion about the study of strategic bidding behavior of generator companies, and points out the problems left for further study.