Electricity markets and intelligent agents part I: Market architecture and structure

Abstract

The electric power industry has undergone a sweep restructuring resulting in the emergence of electricity markets (EMs) worldwide. The trend towards EMs has led to extensive efforts by the research community to develop optimization and equilibrium models adapted to the new competitive industry. The complexity of EMs calls, however, for richer and more flexible modeling techniques. Agent-based simulation is a relatively new approach relying on advanced social science methods as well as established engineering modeling techniques. The agent-based approach presents itself as a promising approach to accurately model and analyze in detail the behavior of EMs over time. Agent-based simulation of EMs is, at the time of writing, an active area of research and a number of prominent models and systems have been proposed in energy-related journals. These high-quality scientific contributions exhibit fairly different features and make use of a diverse range of concepts. Currently, there seems to be no agreed framework to compare the usage of specific concepts in one contribution with usage in other contributions, nor to compare disparate research efforts. This chapter and its companion (Chap. 3) claim that the development of such a framework can be an important step to provide a coherent set of concepts related to the area, to assess progress in the area, and to facilitate the development of future models and systems. Accordingly, this chapter (Part I) and Chap. 3 (Part II) introduce a generic framework for agent-based simulation of EMs. The complete framework includes three groups (or categories) of dimensions: market architecture, market structure and software agents. This chapter describes, in considerable detail, the components of the first two groups of dimensions, notably the architecture and core structure of power markets. The third and last group of dimensions is the subject of Chap. 3.