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The conventional design of electricity markets is based on energy (energy‐based model or EbM). EbM includes some formerly assumed minor flaws that lead to a mismatch between the day‐ahead schedules and real‐time operation. Since these flaws are within the EbM's nature, even without any kind of forecast error, the EbM generation schedule may be unrealizable in real‐time operation. An alternative design based on power (power‐based model or PbM) has been introduced in the previous studies for better real‐time compatibility. Some uninvestigated aspects of this new model are addressed in this paper to shed more light on its pros and cons: (a) Formation of fake demand for extra ramp is likely in PbM. This phenomenon, which is overlooked in previous studies, can endanger system integrity and market performance. This weakness is explained here, and a solution is proposed. (b) Increasing time granularity is known effective for reflecting real‐time condition in the day‐ahead market. We doubled the time resolution of EbM and compared its schedules with PbM's schedules from the viewpoint of real‐time compatibility. (c) Flexibility is a serious issue in the power system. As a new design for market, knowing PbM's impact on this matter is crucial, which is missing in the literature. To fill the gap, PbM's impact on the economic position of flexible units is analyzed here. This paper has a practical perspective, and the input data of the test system are based on the Iranian power grid. The input parameters are scaled down to fit the IEEE 24‐Bus test system.

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The conventional model of the day-ahead electricity markets employs an energy-based approach to manage the competition among the players. Under this format, it is assumed that everything (including the demand and output power of the generating units) is constant during each hour. This assumption greatly simplifies the market, and it is widely incorporated over the globe. However, it leads to mismatches in the real-time operation. With the increase in the share of intermittent sources, such mismatches get higher amplitude and become more threatening for market performance and system security. Powerbased modelling of the electricity market (PbM), which has been introduced as a remedy to eliminate mismatches in real-time operation, has been scrutinized. The previous comparisons between the conventional model and PbM generally deploy a rigid approach based on the existence of perfect competition. They assume that all the generation companies offer their maximum capacity and marginal cost into the market. Moreover, they model a single-side auction in which only the supply side is actively involved in the market. In order to develop the previous studies on PbM, an equilibrium environment to model the players' interactions within a competitive market has been employed. Employment of an equilibrium model brings the benefits of modelling a double-side market and can simulate the strategic behaviour of the market players on both sides within a partially competitive electricity market. The equilibrium model provides empirical insight on how changing the market structure to PbM affects players' behaviour and shifts the market equilibrium and provided some unreported attributes of PbM. The study is based on a real-world network of the Gilan province in northern Iran.

Most of countries have started restructuring process as the salvation route of electricity industry. In the new environment, competition is a fundamental key and it is well known that in any competition, fairness is the major concern of the players. Generally, competition in power system has been started from generation sector, and winners of this competition are chosen via Unit commitment procedure which is supposed to be fair. In Iran central market, Unit Commitment procedure is an optimization problem constrained by some technical limitations including unit operational limitations, grid limitation and reliability requirements. This paper discusses how in Iran Electricity Market the unit constraints affect Unit Commitment result and argues whether these constraints are dealt in a fair manner or not.