Simulating Power Supplier's Behavior in Electricity Market

Abstract

This paper explores what will bring to the electricity market if power suppliers make changes in decision making rules. in the repeated bidding process, it is assumed that any power supplier can choose to bid based on Cournot adjustment learning as usual, or to make a change in his decision making rule such as bidding with his marginal cost or choosing the highest strategy at any stage. Simulation results show some colorful phenomena and indicate the changes in decision making rule can bring diversity to the market. Therefore, rule designers of electricity markets must design corresponding rules to reduce the risks of the market before its operation.