A game-theoretic model of private power production

Private power production has sprung up all around the world, especially in developing countries with rapidly increasing demands and shortage of finance. BOT arrangements have emerged as one of the most important options of private power production. Based on oligopoly theory, this paper proposes a Stackelberg game model between a BOT company and a utility where they negotiate a long-term energy contract. It is assumed that a host utility purchases electricity from a BOT company at its "avoided cost", and sells its electricity to end users at its average cost. Taking asymmetric pricing into account, our Stackelberg game model is transferred into a two-level optimization problem, and is then solved by an iterative algorithm.published_or_final_versio

Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model

In a deregulated market, energy can be exchanged like a commodity and the market agents including generators, distributors, and the end consumers can trade energy independently settling the price, volume, and the supply terms. Bilateral contracts (BCs) have been applied to hedge against price volatility in the electricity spot market. This work introduces a model to find all solutions for the equilibria implementing the Raiffa–Kalai–Smorodinski (RKS) and the Nash Bargaining Solution (NBS) approaches in an electricity market based on BCs. It is based on creating “holes” around an existing equilibrium within the feasibility set, yielding a new (smaller) feasibility set at each iteration. This research has two players: a generation company (GC) and an electricity supplier company (ESC), aiming to achieve the highest profit for each of them. The results present all possible RKS and NBS, in addition to showing all assigned energies for a case study at different time frames. The multiple equilibria solutions allow the ESC and the GC to apply different strategies knowing that they can still achieve an optimal solution

Evolution and reform of UK electricity market

Electricity Market is structured to fund reliable electricity supply, meet the need of consumers, ensure the affordability of end-users, and support national economic development. In recent years, to meet challenging emission target set by Government, power system in the UK has a rapid increase of integration with various-scale Renewable Energy Sources (RESs) and energy storage systems (ESSs), which pushes the electricity market reform to accommodate the changes, encourage renewable energy integration, adopt new technologies, stimulate consumers participation, and ensure the power system resilience. The paper reviews the history of UK electricity market evolution, driving factors of reform, and the trend of current electricity market reform. In history, the UK electricity wholesale market has experienced three significant reform stages, which are introducing the Electricity Pool of England & Wales (the Pool) in the 1980s, implementing the New Electricity Trading Arrangements (NETA) in the 2000s, and performing the Electricity Market Reform (EMR) in 2013. To address the new emerging challenges in decarbonising power generation, the paper explains and analyses on-going electricity market changes and the trend for future electricity market reform

A economia dos custos de transação e a reforma na indústria de energia elétrica do Brasil

Esfe trabalho é uma confribuição para o estudo da reforma que está em curso naindústria de energia eletrica do Brasil. A economia dos custos de transação e o referencial teórico utilizado para explicar as mudanças na estrutura de governançavigente e para avaliar as possíveis efeifos da nova governança no desempenho daindústria. Conclui-se que apesar dos mecanismos de incentivo à competição, como adesverticalização, as restrições, as participações cruzadas (crossonwerships) e os limitesde auto-suprimento (self-dealing), a especificidade dos ativos envolvidos, a volatilidadedos cusfos marginals de curto prazo, a necessidade de coordenação central e asexigências de incentivos à expansão da capacidade instalada induzirão a indústria auma governançaa híbrida, abrangendo a competição e cooperação, mais esta do que aquela.This work is meant to contribute to the study of the ongoing electric power industry inBrazil. The transactions cost economics is the referential theorethical used to explain thechanges in the current governance structure and to assess the possible effects of thenew governance in the industry's performance. The conclusion is that, despite themechanisms of competition incentive, such as separating distribution, transmission andgeneration, restrictions to crossownerships and self-dealing limits, the investmentespecific, the volatility of the short term marginal cost, the need to central co-ordinationand of incentives to expand the installed capacity will induce the industry into a hybridgovernance, fuekked by competition and co-operation, tending more to the latter

A estrutura de governança da indústria de energia elétrica: uma análise através da economia dos custos de transação

Este trabalho é uma contribuição para o estudo da reforma que está em curso na indústria de energia elétrica do Brasil. A economia dos custos de transação é o referencial teórico utilizado para explicar as mudanças na estrutura de governança vigente e para avaliar os possíveis efeitos da nova governança no desempenho da indústria. Conclui-se que, apesar dos mecanismos de incentivo à competição, como a desverticalização, as restrições a participações cruzadas (crossonwerships) e os limites de auto-suprimento (self-dealing), a especificidade dos ativos envolvidos, a volatilidade dos custos marginais de curto prazo, a necessidade de coordenação central e as exigências de incentivos à expansão da capacidade instalada induzirão a indústria a uma governança híbrida, abrangendo a competição e a cooperação, mais esta do que aquela

Enabling cooperative and negotiated energy exchange in remote communities

Energy poverty at the household level is defined as the lack of access to electricity and reliance on the traditional use of biomass for cooking, and is a serious hindrance to economic and social development. It is estimated that 1.3 billion people live without access to electricity and almost 2.7 billion people rely on biomass for cooking, a majority of whom live in small communities scattered over vast areas of land (mostly in the Sub-Saharan Africa and the developing Asia). Access to electricity is a serious issue as a number of socio-economic factors, from health to education, rely heavily on electricity. Recent initiatives have sought to provide these remote communities with off-grid renewable microgeneration infrastructure such as solar panels, and electric batteries. At present, these resources (i.e., microgeneration and storage) are operated in isolation for individual home needs, which results in an inefficient and costly use of resources, especially in the case of electric batteries which are expensive and have a limited number of charging cycles. We envision that by connecting homes together in a remote community and enabling energy exchange between them, this microgeneration infrastructure can be used more efficiently. Against this background, in this thesis we investigate the methods and processes through which homes in a remote community can exchange energy. We note that remote communities lack general infrastructure such as power supply systems (e.g., the electricity grid) or communication networks (e.g., the internet), that is taken for granted in urban areas. Taking these challenges into account and using insights from knowledge domains such game theory and multi-agent systems, we present two solutions: (i) a cooperative energy exchange solution and (ii) a negotiated energy exchange solution, in order to enable energy exchange in remote communities.Our cooperative energy exchange solution enables connected homes in a remote community to form a coalition and exchange energy. We show that such coalition a results in two surpluses: (i) reduction in the overall battery usage and (ii) reduction in the energy storage losses. Each agents's contribution to the coalition is calculated by its Shapley value or, by its approximated Shapley value in case of large communities. Using real world data, we empirically evaluate our solution to show that energy exchange: (i) can reduce the need for battery charging (by close to 65%) in a community; compared with when they do not exchange energy, and (ii) can improve the efficient use of energy (by up to 10% under certain conditions) compared with no energy exchange. Our negotiated energy exchange solution enables agents to negotiate directly with each other and reach energy exchange agreements. Negotiation over energy exchange is an interdependent multi-issue type of negotiation that is regarded as very difficult and complex. We present a negotiation protocol, named Energy Exchange Protocol (EEP), which simplifies this negotiation by restricting the offers that agents can make to each other. These restrictions are engineered such that agents, negotiation under the EEP, have a strategy profile in subgame perfect Nash equilibrium. We show that our negotiation protocol is tractable, concurrent, scalable and leads to Pareto-optimal outcomes (within restricted the set of offers) in a decentralised manner. Using real world data, we empirically evaluate our protocol and show that, in this instance, a society of agents can: (i) improve the overall utilities by 14% and (ii) reduce their overall use of the batteries by 37%, compared to when they do not exchange energy