Developing strategies for bidding in energy brokerages through simulation
- Iowa State Univ., Ames, IA (United States)
In the deregulated future of the electric power industry, some new market structures are evolving. One such market structure is the energy brokerage, where participants bid hourly for selling and buying electric energy. These participants might attempt to achieve their performance goals (such as maximizing savings) in the market by strategically altering the operation of their system and the price they bid to buy or sell energy. This paper focuses on the bidding behavior of participants. The goal of this paper is to illustrate some schemes by which the participants may improve their performance by using available information about the market such as historical prices. Typically, such information is incomplete or uncertain (or both). Therefore, a deterministic solution to the bidding problem that guarantees optimal performance is not possible. However, a simple suboptimal strategy that seeks to optimize lower bounds to expected values of profits has been developed by the authors in earlier work, and is outlined in this paper. In order to test this and other strategies, a brokerage simulator has been developed, and is also outlined. A realistic test system including participants of various sizes is used. Results from simulation of different markets scenarios are presented for each participant. Preliminary results indicate that suboptimal bidding does improve the performance of participants under certain conditions. However, further strategies need to be developed for achieving more consistent and better results. Implementation of the suboptimal strategy itself can be further improved heuristically. Furthermore, the brokerage simulator itself is an important tool that will aid in both testing and development of new strategies.
- OSTI ID:
- 514838
- Report Number(s):
- CONF-970456--
- Country of Publication:
- United States
- Language:
- English
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