Three electricity market principles and electricity value equivalent (EVE) pricing methodology

Abstract

This paper presents the three market principles and the electricity value equivalent (EVE) pricing method. The developed electricity market pricing methodology have solved the three great difficult market problems in the world. We have also researched the market character of EVE pricing methods using analysis method and the intelligent agent-based method, taking into account the bidding action (Bertrand game) and the withholding capacity action (Cournot game) of participants and comparing with the uniform cleaning pricing (UCP) and pay as bid (PAB) pricing. Besides the market efficiency and the capacity adequate return, the results show that the EVE pricing method can induce the power suppliers bidding according to their true operation cost and without capacity withholding. This is an invaluable, market character. We call it market 'inductivity' which is different from reliability, stability and robustness etc. As we know that there are no such properties for any other pricing methods.