A design and simulation of a Brazilian bid based short-term electricity market

Abstract

-In order to overcome a number of difficulties detected on the Brazilian electricity market this paper proposes and tests a bid based short-term market. To simulate the behavior of the hydros in this new market, it was implemented an Agent-Based Model -ABM using the reinforcement QLearning algorithm, Simulated Annealing, and linear programming. In the simulations we used real data from the Brazilian power system encompassing more than 98% of the total hydro installed capacity and three years of market data. The results indicate that the management of (virtual) reservoirs can be under the responsibility of each hydro, which could save water according to their own risk perception, while it is maintained the current efficiency and security levels. Results also suggest that the final monthly short-term market prices can substantially decrease in comparison with the current prices.Index Terms -Agent-based simulation, Brazilian power system, Q-learning, Virtual reservoirs.

Agent Based Models in Power Systems

“…With the transition from vertically integrated utilities to deregulated electricity markets, power systems' complexity is increasing, namely because new rules and players are emerging and being implemented. Distributed generation (smart grid and microgrids) (Farhangi 2010), EVs (Tan, Ramachandaramurthy, and Yong 2016), consumption flexibility and DR processes (Faria, Spínola, and Vale 2016), large penetration of renewable-based generation (Calabria, Saraiva, and Rocha 2016), energy efficiency measures (Zhou et al 2016), and building energy management (Mittal et al 2019), among many others, contribute to the increasing management and operation complexity, the transmission and distribution networks and the interactions between traditional and new players. The uncertainties associated with the renewable-based generation, electricity market prices, energy consumption, or EVs are just a few examples of the increased sources of uncertainty and thus of complexity brought to the power and the energy sector.…”

“…The author with most papers published in this search field is Saraiva, Joao Tome, with 4 articles (Sousa and Saraiva 2017;Calabria, Saraiva, and Rocha 2015a, 2015b.…”

“…Apart from describing the developed model, this paper also includes preliminary results from its application to the MIBEL case. Calabria, Saraiva, and Rocha (2016) propose and test a bid based short-term market in order to overcome difficulties identified in the Brazilian electricity market. To simulate the behavior of the hydro units, it was implemented an ABM using the reinforcement Q-Learning algorithm, Simulated Annealing, and linear programming.…”

“…A market design based on virtual reservoirs was proposed in Calabria, Saraiva, and Rocha (2015b). This model aims at enhancing the flexibility to enable market participants to comply with their contracts while still ensuring the efficient use of the water and maintaining the current security of supply.…”

“…This model aims at enhancing the flexibility to enable market participants to comply with their contracts while still ensuring the efficient use of the water and maintaining the current security of supply. Some of the problems related to the current Brazilian electricity market were analyzed in Calabria, Saraiva, and Rocha (2015a). This paper proposes a new market design to overcome these issues based on the concept of virtual reservoirs and aims at enhancing the flexibility to enable market participants to comply with their contracts while still ensuring the efficient use of the energy resources and maintaining the current security supply level.…”