Non-Cooperative Game in Block Bidding Markets Considering Demand Response

Ningxuan Guo, Yinan Wang, Gangfeng Yan and Jian Hou
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Ningxuan Guo: College of Electrical Engineering, Zhejiang University, Zheda Rd. 38, Hangzhou 310027, China
Yinan Wang: State Grid Energy Research Institute Co., Ltd., Changping District, Beijing 102209, China
Gangfeng Yan: College of Electrical Engineering, Zhejiang University, Zheda Rd. 38, Hangzhou 310027, China
Jian Hou: School of Information Science and Technology, Zhejiang Sci-Tech University, Hangzhou 310018, China

Energies, 2020, vol. 13, issue 13, 1-18

Abstract: 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.

Keywords: demand response; block bidding market; non-cooperative game; supply function; distributed iteration (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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