An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy

Bo Jie, Takao Tsuji, Kenko Uchida

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    2 Citations (Scopus)

    Abstract

    Recently, with the penetration of renewable energy sources, the balancing market becomes more important worldwide. With the purpose of profit-maximization, suppliers are constantly researching the bidding strategy when bidding into the auction of balancing market. There are two mainstreams of auction mechanisms in balancing markets: 'uniform-price auction' based on marginal fuel cost and 'pay-as-bid auction' with discriminatory pricing. We have so far analyzed the difference of the clearing point given by both these two mechanisms. Here, the bidding strategy of market participants were modelled by using Q-Learning in which expected final reward of each player in the balancing market was maximized. The simulation result also depends on the simulation model, in particular, the marginal cost of generating plants. So, it is necessary for us to explore the various simulation settings to find out the desirable market mechanism. On the other hand, in Japan, the balancing market should be set out in the future as real time market. Under this condition, in this paper, we mainly evaluate the rationality of the trading based on the uniform-price and pay-as-bid auction mechanisms by using more realistic power system model considering the future power and energy situation in Japan.

    Original languageEnglish
    Title of host publication2017 14th International Conference on the European Energy Market, EEM 2017
    PublisherIEEE Computer Society
    ISBN (Electronic)9781509054992
    DOIs
    Publication statusPublished - 2017 Jul 14
    Event14th International Conference on the European Energy Market, EEM 2017 - Dresden, Germany
    Duration: 2017 Jun 62017 Jun 9

    Other

    Other14th International Conference on the European Energy Market, EEM 2017
    CountryGermany
    CityDresden
    Period17/6/617/6/9

    Fingerprint

    Costs
    Profitability
    Renewable energy
    Market mechanism
    Bidding strategy
    Auctions
    Simulation
    Bid
    Japan
    Penetration
    Power system
    Profit maximization
    Reward
    Renewable energy sources
    Discriminatory pricing
    Uniform price auction
    Rationality
    System model
    Marginal cost
    Simulation model

    Keywords

    • Balancing market
    • Bidding strategy
    • Pay-as-bid auction
    • Q-Learning
    • Uniform-pricing auction

    ASJC Scopus subject areas

    • Marketing
    • Energy Engineering and Power Technology
    • Fuel Technology

    Cite this

    Jie, B., Tsuji, T., & Uchida, K. (2017). An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy. In 2017 14th International Conference on the European Energy Market, EEM 2017 [7981944] IEEE Computer Society. https://doi.org/10.1109/EEM.2017.7981944

    An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy. / Jie, Bo; Tsuji, Takao; Uchida, Kenko.

    2017 14th International Conference on the European Energy Market, EEM 2017. IEEE Computer Society, 2017. 7981944.

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    Jie, B, Tsuji, T & Uchida, K 2017, An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy. in 2017 14th International Conference on the European Energy Market, EEM 2017., 7981944, IEEE Computer Society, 14th International Conference on the European Energy Market, EEM 2017, Dresden, Germany, 17/6/6. https://doi.org/10.1109/EEM.2017.7981944
    Jie B, Tsuji T, Uchida K. An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy. In 2017 14th International Conference on the European Energy Market, EEM 2017. IEEE Computer Society. 2017. 7981944 https://doi.org/10.1109/EEM.2017.7981944
    Jie, Bo ; Tsuji, Takao ; Uchida, Kenko. / An analysis of market mechanism and bidding strategy for power balancing market mixed by conventional and renewable energy. 2017 14th International Conference on the European Energy Market, EEM 2017. IEEE Computer Society, 2017.
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