Non-Cooperative Game in Block Bidding Markets Considering Demand Response

Abstract

<jats:p>With the reform of electricity markets, demand response (DR) plays an important role in providing flexibility to the markets. Block bidding market is a new market mode, which is based on the concept of “the same quality, the same price”. The mechanism has great effects in reducing start-stop related costs. In this paper, we propose a double-sided non-cooperative game model in block bidding markets with a DR program. The model combines the advantages of block bidding and the simplicity of hourly bidding. In the model, one side is the non-cooperative game of supply-side power firms, and we propose a novel supply function bidding model based on block duration and load capacity to maximize each firm’s profit. The other side is the demand-side different types of customers, and we propose a DR model that combines hourly-various prices with the block bidding mechanism to maximize each customer’s payoff. The overall market optimization problem is solved by a distributed iterative algorithm, which has great convergence performance. We verify the proposed model on real data, and the results show that the demand load curve becomes flattened with DR, and the total generation costs decrease while the social welfare is significantly improved.</jats:p>

Modelling utility-aggregator-customer interactions in interruptible load programmes using non-cooperative game theory

“…By applying the model to a hypothetical case example, the authors have demonstrated the superiority of their proposed model to the business-as-usual approaches in terms of maximising social welfare. In a marked departure from the existing literature, Guo et al [47] go further and apply their proposed method to DR-integrated block bidding markets, where the total electricity demand is divided into multiple blocks and the auction is processed block by block, each with an individual market-clearing price, in contrast to the traditional hourly pricing model. Similarly, Golmohamadi et al [48] have formulated a multi-agentbased scheduling framework for trading residential and industrial flexibility procured through DRAs in electricity markets.…”