Comparing system-marginal-price versus pay-as-bid auctions in a realistic electricity market scenario

Eric Guerci and Mohammad Ali Rastegar
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Mohammad Ali Rastegar: Chercheur indépendant

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Abstract: A realistic agent-based computational model of the day-ahead market session of the Italian wholesale electricity market is simulated to compare market performances between system-marginal-price and pay-as-bid clearing mechanisms. An empirical validation of computational results at a macro-level is performed to test for accuracy of simulated outcomes with historical ones. The level of prices are accurately reproduced except for few peak hours. As far as concerns pay-as-bid auction, the computational experiments point out that it results in higher market prices than the system-marginal-price auction. In the pay-as-bid mechanism, sellers' endeavours to maximize their profits are more costly thus leading to higher price levels

Keywords: Electricity markets; agent-based computational economics; uniform auction; discriminatory auction; empirical validation (search for similar items in EconPapers)
Date: 2012-09
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Citations: View citations in EconPapers (1)

Published in Artificial Economics 2012, Sep 2012, Castellon, Spain. pp.141-153, ⟨10.1007/978-3-642-31301-1_12⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00871081

DOI: 10.1007/978-3-642-31301-1_12

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