Electric Power Markets in Transition: Agent-Based Modeling Tools for Transactive Energy Support

Tesfatsion, Leigh

doi:10.1016/bs.hescom.2018.02.004

Cited by 30 publications

(33 citation statements)

References 61 publications

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“…Such assumptions are difficult to include in optimization models. In a world where electric power systems are becoming increasingly complex, agent-based models may serve as computational laboratories for the validation of market design prior to realworld implementation [6].…”

Section: Introductionmentioning

confidence: 99%

Exploring the competition between variable renewable electricity and a carbon-neutral baseload technology

et al. 2018

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In this paper we explore the competition between variable renewable energy sources (VRE) and a carbon-neutral baseload technology in the transition to a low-carbon power system. We study a stylized system subject to a gradually increasing carbon tax using an agent-based model where agents are power companies investing in new capacity. The agents make predictions of the profitability of different investment options. Five electricity generating technologies are available in the model: coal, gas, wind, solar PV and a more expensive carbon-neutral baseload technology. We compare the output from our model with a corresponding optimization model. We present two main findings: (1) installed capacity of VRE initially increases with a carbon tax. However, once the carbon tax has reached a certain level the installed capacity of VRE starts to decline due to competition with the stylized carbon-neutral baseload technology.(2) With limited foresight we find that the model underinvests (first 25 years) in wind and then overinvests in wind compared to the optimal solution. The reasons for these dynamic phenomena are explained and an extensive sensitivity analysis is carried out.123 22 E. Jonson et al.

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Section: Introductionmentioning

confidence: 99%

Exploring the competition between variable renewable electricity and a carbon-neutral baseload technology

et al. 2018

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“…As detailed in ref. [40], the study of TES designs is still relatively new, and the source code developed for most of these studies is not publicly available. A key exception is work based on GridLAB-D [5], [13], an open-source agentbased computational platform developed by researchers with the U.S. Department of Energy at Pacific Northwest National Laboratory (PNNL).…”

Section: Background Motivationmentioning

confidence: 99%

“…Finally, total net benefit for a market is defined to be the summation of all net benefit extracted from the market by market participants. Thus, for the market example at hand, total net benefit is given by the sum of (39) and (40), which results in…”

Section: B Welfare and Efficiency Analysis For A Simple Marketmentioning

confidence: 99%

Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets

Thomas

Tesfatsion

2018

IEEE Trans. Power Syst.

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This study investigates the effects of dynamic-price retail contracting on end-to-end power system operations. Performance is evaluated by means of carefully defined metrics for system stability, market efficiency, and market participant welfare. The study is carried out for an Integrated Retail and Wholesale (IRW) Test Case for which households have smart (price-responsive) air-conditioning (A/C) systems. A simplified version of the IRW Test Case with a directly postulated linear household demand curve is first used to derive, analytically, a set of necessary and sufficient conditions for system stability under dynamic-price retail contracting. A key finding is that dynamicprice retail contracts induce braided cobweb dynamics consisting of two interwoven cycles for power and price outcomes that can exhibit point convergence, limit-cycle convergence, or divergence depending on a small set of structural parameters. Outcomes are then reported for a dynamic welfare sensitivity study undertaken using the full IRW Test Case with smart household A/C systems. One surprising finding is that dynamic-price retail contracts with a positive price mark-up result in worse welfare outcomes for generators and household residents than flat-rate retail contracts for treatments exhibiting convergent cobweb dynamics.

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“…In recent years, agent-based modeling principles are increasingly being used to design "bottom up" Transactive Energy System (TES) architectures for electric power systems (GAC, 2015;Tesfatsion, 2017k). TES architectures are decentralized market-based mechanisms that permit electric power systems to operate more fully in accordance with core economic principles.…”

Section: Ace Modeling Principles As Real-world Design Principlesmentioning

confidence: 99%

“…Source: Tesfatsion (2017k) erating over a transmission grid is tightly linked through DER and load aggregators to a distribution system with distributed generation and prosumers locally managed by intelligent software agents. An important characteristic of such a system is that power and data can flow up as well as down between the wholesale and retail electric power sectors.…”

Section: Ace Modeling Principles As Real-world Design Principlesmentioning

confidence: 99%

Modeling economic systems as locally-constructive sequential games

Tesfatsion

2017

Journal of Economic Methodology

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Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these essential properties imply real-world economies are locally-constructive sequential games. This paper discusses a modeling approach, agent-based computational economics (ACE), that permits researchers to study economic systems from this point of view. ACE modeling principles and objectives are first concisely presented. The remainder of the paper then highlights challenging issues and edgier explorations that ACE researchers are currently pursuing.

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Electric Power Markets in Transition: Agent-Based Modeling Tools for Transactive Energy Support

Cited by 30 publications

References 61 publications

Exploring the competition between variable renewable electricity and a carbon-neutral baseload technology

Exploring the competition between variable renewable electricity and a carbon-neutral baseload technology

Braided Cobwebs: Cautionary Tales for Dynamic Pricing in Retail Electric Power Markets

Modeling economic systems as locally-constructive sequential games

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