scholarly journals How Elastic Demand Affects Bidding Strategy in Electricity Market：An Auction Approach

2018 ◽  
Author(s):  
Debin Fang ◽  
Qiyu Ren ◽  
Qian Yu
Keyword(s):  
Market Power ◽  
Electricity Market ◽  
Bidding Strategy ◽  
Elastic Demand ◽  
Demand Distribution ◽  
Transmission Cost ◽  
Bidding Price ◽  
Bidding Mechanism ◽  
The Impact

The deepening of electricity reform results in increasingly frequent auctions and the surge of generators, it becomes difficult to analyze generators’ behaviors. Since it’s hard to find analytical market equilibriums, approximate equilibriums were obtained instead in previous studies by market simulations, which are strict to initial estimations and simulation results are chaotic in some cases. In this paper, a multi-unit power bidding model is proposed to reveal the bidding mechanism under clearing pricing rule by employing auction approach, for which initial estimations are non-essential. Normalized bidding price is introduced to construct generator's price-related bidding strategy. Nash equilibriums are derived depend on the marginal cost and the winning probability which are computed from bidding quantity, transmission cost and demand distribution. Furthermore, we propose a comparative analysis to explore the impact of uncertain elastic demand on the performance of the electricity market. The result indicates that, there exists market power among generators leading to social welfare decreases even under competitive conditions but elastic demand is an effective way to restrain generators’ market power. The feasibility of the models is verified by a case study. Our work provides decision support for generators and a direction for improving market efficiency.

scholarly journals How Elastic Demand Affects Bidding Strategy in Electricity Market: An Auction Approach

Energies ◽  
2018 ◽  
Vol 12 (1) ◽  
pp. 9 ◽  
Author(s):  
Debin Fang ◽  
Qiyu Ren ◽  
Qian Yu
Keyword(s):  
Market Power ◽  
Electricity Market ◽  
Bidding Strategy ◽  
Elastic Demand ◽  
Demand Distribution ◽  
Transmission Cost ◽  
Pricing Rules ◽  
Bidding Price ◽  
Bidding Mechanism ◽  
The Impact

The deepening of electricity reform results in increasingly frequent auctions and the surge of generators, making it difficult to analyze generators’ behaviors. With the difficulties to find analytical market equilibriums, approximate equilibriums were obtained instead in previous studies by market simulations, where in some cases the results are strictly bound to the initial estimations and the results are chaotic. In this paper, a multi-unit power bidding model is proposed to reveal the bidding mechanism under clearing pricing rules by employing an auction approach, for which initial estimations are non-essential. Normalized bidding price is introduced to construct generators’ price-related bidding strategy. Nash equilibriums are derived depending on the marginal cost and the winning probability which are computed from bidding quantity, transmission cost and demand distribution. Furthermore, we propose a comparative analysis to explore the impact of uncertain elastic demand on the performance of the electricity market. The result indicates that, there exists market power among generators, which lead to social welfare decreases even under competitive conditions but elastic demand is an effective way to restrain generators’ market power. The feasibility of the models is verified by a case study. Our work provides decision support for generators and a direction for improving market efficiency.

scholarly journals Optimal Electricity Allocation Model Under China's Planning-Market Double-Track Mechanism Considering Bidding Game of Generation Companies

2021 ◽  
Vol 9 ◽  
Author(s):  
Jinrui Cui ◽  
Yating Li ◽  
Chuan He ◽  
Zhi Zhang ◽  
Haichao Wang ◽  
...  
Keyword(s):  
Market Power ◽  
Electricity Market ◽  
Demand Curve ◽  
Market Price ◽  
Smooth Transition ◽  
Bidding Strategy ◽  
Allocation Model ◽  
Bidding Game ◽  
Double Track ◽  
The Impact

In China, under the planning-market double-track mechanism implemented on the generation side of electricity, unreasonable market-oriented power generation proportion may lead to unnecessary vicious competition and market price changes, and it is against the will of power exchange (PX). Given this background, in this study, a bi-level model for planning-market electricity allocation that considers the bidding game of generation companies is proposed for a smooth transition of power system reform. In the upper level of the model, the proportion of planned electricity is optimized by PX to minimize the average social electricity purchase price. In the lower level of the model, considering the impact of market power on the bidding strategy of generation companies, the bidding strategy of generation companies set as price makers is proposed using the residual demand curve analysis method, while the price takers adopt the lowest bidding strategy. Simulations based on data from a provincial electricity market in China illustrate that the proposed model can effectively reflect the impact of market-oriented electricity proportion on market power and market-clearing price, thus providing a quantitative basis for PX to determine the proportion of market-oriented electricity in total electricity consumption.

Bidding Decision Model Based on Prospect Theory and Game Theory

2013 ◽  
Vol 723 ◽  
pp. 951-959 ◽  
Author(s):  
Min Yuan Cheng ◽  
Chia Chi Hsiang
Keyword(s):  
Game Theory ◽  
Construction Industry ◽  
Decision Model ◽  
Decision Makers ◽  
Competitive Bidding ◽  
Bidding Strategy ◽  
Actual Case ◽  
Bidding Price ◽  
Optimal Bidding

In the construction industry, most of the owners apply competitive bidding to award a contract to the lowest price qualified contractor. This study proposes a model concerning the preferences and the behaviors of all decision makers whom participation in an competitive bidding to assist contractors to make optimal bidding strategy decisions and set appropriate bidding prices. Researchers demonstrated model applicability using an actual case study, which shows how this model help the construction company’s primary decision maker to determine the appropriate bidding price in a multi-competitors condition.

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