Designing an Incentive Contract Menu for Sustaining the Electricity Market

Ying Yu, Tongdan Jin and Chunjie Zhong
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Ying Yu: School of Mechatronics Engineering and Automation, Shanghai University, Shanghai 200072, China
Tongdan Jin: Ingram School of Engineering, Texas State University, San Marcos, TX 78666, USA
Chunjie Zhong: School of Mechatronics Engineering and Automation, Shanghai University, Shanghai 200072, China

Energies, 2015, vol. 8, issue 12, 1-22

Abstract: This paper designs an incentive contract menu to achieve long-term stability for electricity prices in a day-ahead electricity market. A bi-level Stackelberg game model is proposed to search for the optimal incentive mechanism under a one-leader and multi-followers gaming framework. A multi-agent simulation platform was developed to investigate the effectiveness of the incentive mechanism using an independent system operator (ISO) and multiple power generating companies (GenCos). Further, a Q-learning approach was implemented to analyze and assess the response of GenCos to the incentive menu. Numerical examples are provided to demonstrate the effectiveness of the incentive contract.

Keywords: stackelberg game; Q-learning; multi-agent simulation; electricity market; incentive mechanism (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: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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