Optimal combinatorial electricity markets

  • Authors:
  • Yoseba K. Penya;Nicholas R. Jennings

  • Affiliations:
  • (Correspd. E-mail: ypenya@tecnologico.deusto.es) Deusto Technology Foundation, University of Deusto, Mundaiz bidea 50 (20012), Donostia/San Sebastián, Basque Country;School of Electronics and Computer Science, University of Southampton, Southampton SO17 1BJ, United Kingdom

  • Venue:
  • Web Intelligence and Agent Systems
  • Year:
  • 2008

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Abstract

The deregulation of the electricity industry in many countries has created a number of marketplaces in which producers and consumers can operate in order to more effectively manage and meet their energy needs. To this end, this paper develops a new model for electricity retail where end-use customers choose their supplier from competing electricity retailers. The model is based on simultaneous reverse combinatorial auctions, designed as a second-price sealed-bid multi-item auction with supply function bidding. This model prevents strategic bidding and allows the auctioneer to maximise its pay-off. Furthermore, we develop optimal single-item and multi-item algorithms for winner determination in such auctions that are significantly less complex than those currently available in the literature.