In the initial stage of electricity market construction, incentive-based demand response can effectively mitigate price spikes. Considering the overall equilibria of the market, it is of great significance to study the impact of incentive-based demand response on market clearing and participants’ behaviours. Firstly, this paper analyzes the compensation methods of incentive- based demand response and establishes an equilibrium model of day-ahead electricity market bidding that takes into account demand response. Secondly, considering the overall equilibrium conditions of the market, the overall equilibrium model of the market is established. Results show that the incentive-based demand response mechanism has a restraining effect on the generators’ bidding, and the load reduction effect is prominent when the network is congested.
As a major way to consume new energy, energy transmission across provinces and regions has increased rapidly in recent years. It is of great importance for the construction of the spot market to study the impact of different uncertainty of the outside power on the joint energy and reserve market. Firstly, this paper establishes a joint energy and reserve market equilibrium model that takes into account the uncertainty of the outside power which leads to additional reserve demand. Secondly, a game equilibrium algorithm is proposed to solve the market final equilibrium. The simulation results show that the uncertainty of the outside power will not only reduce market efficiency but also damage the interests of the outside new energy generator itself.
This paper investigates the efficiency loss in social cost caused by strategic bidding behavior of individual participants in a supply-demand balancing market, and proposes a mechanism to fully recover equilibrium social optimum via subsidization and taxation. We characterize the competition among supply-side firms to meet given inelastic demand, with linear supply function bidding and the proposed efficiency recovery mechanism. We show that the Nash equilibrium of such a game exists under mild conditions, and more importantly, it achieves the underlying efficient supply dispatch and the market clearing price that reflects the truthful system marginal production cost. Further, the mechanism can be tuned to guarantee self-sufficiency, i.e., taxes collected counterbalance subsidies needed. Extensive numerical case studies are run to validate the equilibrium analysis, and we employ individual net profit and a modified version of Lerner index as two metrics to evaluate the impact of the mechanism on market outcomes by varying its tuning parameter and firm heterogeneity.
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