Extending a Spot Market Multi-Agent Simulator to Model Investment Decisions

Abstract

For several years, EPRI has been developing a multi-agent simulator for spot electricity markets called STEMS. We present here an extension, jointly developed by EPRI and EDF, of this simulator to handle investment decisions in new generation capacity. This extension is applied to a case study inspired from real market data, to demonstrate the use of these simulations for analyzing interactions between long and shortterm decisions of strategic profit-maximizing agents. We also use an elementary example to observe the impact of varying market structures, pertaining to new entry or to the level of forward contracting. Agent-based modeling provides a flexible framework able to deal with the complexity of real-world situations. Our view is that such agent-based simulations should henceforth become an essential component of the objective evaluation of candidate resource adequacy policies.

Analyzing Trade in Continuous Intra-Day Electricity Market: An Agent-Based Modeling Approach

“…Agent-based modeling provides a framework for simulating the operation of electricity markets, with the purpose of investigating the behavior of different market participants and to study their interactions. Some of the agent-based models (ABMs) that have been developed in the past include EMCAS (electricity market complex adaptive systems) by [19,20], NEMSIM (national electricity market simulation system) by [21], STEMS-RT (short-term electricity market simulator-real time) by [22], SEPIA (simulator for electric power industry agents) by [23], AMES (agent-based modeling of electricity system) by [24], and MASCEM (multi-agent system that simulates competitive electricity markets) by [25]. A detailed literature review of these models has been performed by [26].…”

Agent-Based Models in Electricity Markets: A Literature Review

“…Reference [45] proposes an ABM to allocate cost of investment amongst different players in the market based on the benefit that each player gets by setting up the new transmission line in the system. A two-stage model for players that have both short and long-term strategies was developed in [46]. With forward contracts and new entry, market power was mitigated to some extent leading to lower electricity price and more investments.…”

Survey on Complex Optimization and Simulation for the New Power Systems Paradigm

“…Two autonomous biding strategies are available for suppliers, namely, a conservative approach, consisting in bidding all generations at the marginal cost. The second approach [126] 373 [127] 330 [128] 287 [129] 282 [130] 264 [131] 240 [132] 220 [133] 212 [134] 195 17 Complexity tries to maximize the profit on a short-term basis [169]. STEMS-RT, however, does not include some important electricity market participants such as consumers, aggregators, or the ISO.…”