Security-constrained competitive mechanism research for the generation-side electricity market based on economic mechanism design theory

Abstract

Summary Traditional electricity market mechanisms cannot effectively control strategic behaviors of power generation companies, resulting in reduced market efficiency. Based on the economic mechanism design theory, a decentralized decision‐making competitive mechanism applied in the generation‐side electricity market is developed to reduce the strategic behaviors of generation companies and align individual interests with overall interests. At first, market clearing patterns and characteristics for the generation‐side electricity market are analyzed. Then, a study is conducted on the ideal economic mechanism design to identify 3 main elements of the mechanism, namely, information space, equilibrium information function, and result function. Considering the physical constraints of the electricity system, including generator output constraint and the active power flow constraints for transmission lines, the ideal economic mechanism is refined. Finally, the effectiveness and practicability of the economic mechanism are verified through simulation on IEEE‐14 system.

A study of coupled incentive-based clearing mechanisms in electricity markets considering uncertainty risk

“…In the context of the new round of power sales side market reform, demand-side loads will participate in market interactions more flexibly and proactively, which provides a new opportunity for the implementation of demand response in China's spot power market [9][10]. Incentive-based demand response uses direct economic incentives to guide customers to adjust and optimize their electricity consumption behavior, providing a resource that can be flexibly dispatched for cost management and reliability analysis in the market, and is favored by various markets [11].…”

Design of a Stochastic Electricity Market Mechanism with a High Proportion of Renewable Energy

“…The design of the market mechanism needs to emphasize the synergy of new energy, traditional energy, and flexible resources to coordinate the technical characteristics and economic endowments of flexible resources, such as traditional coalfired power generation, hydroelectric power generation, and new energy power generation. The government, industry, and academia are all aware of the inadaptability of the current market mechanism, and the exploration and research of the market mechanism has become one of the hot spots in the research of the power industry in the context of the new power system [6][7][8][9][10][11]. Zhu Yonggang et al proposed a decentralized decision-making competition mechanism applied to the generation-side electricity market based on the theory of economic mechanism design, in order to reduce the strategic behavior of power generation enterprises and coordinate individual interests with overall interests [6].…”

“…The government, industry, and academia are all aware of the inadaptability of the current market mechanism, and the exploration and research of the market mechanism has become one of the hot spots in the research of the power industry in the context of the new power system [6][7][8][9][10][11]. Zhu Yonggang et al proposed a decentralized decision-making competition mechanism applied to the generation-side electricity market based on the theory of economic mechanism design, in order to reduce the strategic behavior of power generation enterprises and coordinate individual interests with overall interests [6].…”