Incentive Bidding Mechanism Design In Generation Side Considering Capacity Cost

During the electricity market reform process, bidding mechanism design is an important issue to be solved urgently, but current market cleaning price bidding mechanism and pay-as-bid bidding mechanism present serious phenomenon of making false report of high price because of information asymmetry and lacking capacity cost compensating in the implementation process. Therefore, in order to resolve these problems, this paper designed a new incentive bidding mechanism with the theory of mechanism designing. In this mechanism, power company obtain the payments which includes two parts:the cost compensating item and the information compensating item, also the last item includes capacity cost compensating. So this mechanism model can guide them to disclose own real cost information while get enough capacity cost compensating. Theoretical derivation and Monte Carlo simulation results confirm that, to the power company, presenting its real cost is its most superior strategy and they can get its capacity cost compensating in this mechanism.