Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework

Junjie Sun and Leigh Tesfatsion ()

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated market design - the Wholesale Power Market Platform (WPMP) – for common adoption by all U.S. wholesale power markets. Versions of the WPMP have been implemented in New England, New York, the mid-Atlantic states, the Midwest, and the Southwest, and California. Strong opposition to the WPMP persists among some industry stakeholders, however, due largely to a perceived lack of adequate performance testing. This study reports on the model development and open-source implementation (in Java) of a computational wholesale power market organized in accordance with core WPMP features and operating over a realistically rendered transmission grid subject to congestion effects. The traders within this market model are strategic profit-seeking agents whose learning behaviors are based on data from human-subject experiments. Our key experimental focus is the complex interplay among structural conditions, market protocols, and learning behaviors in relation to short-term and longer-term market performance. Findings for a dynamic 5-node transmission grid test case are presented for concrete illustration. Annotated pointers to related work can be accessed here: http://www.econ.iastate.edu/tesfatsi/AMESMarketHome.htm

Keywords: Wholesale power market restructuring; Empirical input validation; Market design; Behavioral economics; Learning; Market power; Agent-based modeling; AMES wholesale power market framework; Java; RepastJ. (search for similar items in EconPapers)
JEL-codes: C6 D8 L1 L9 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cmp, nep-com and nep-ene
Date: 2006-07-27
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Published in Computational Economics, October 2007, Vol. 30, No. 3, pp. 291-327.

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http://www.econ.iastate.edu/research/webpapers/paper_12649_06025.pdf (application/pdf)

Related works:
Journal Article: Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:12649

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