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Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework

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Author Info
Sun, Junjie
Tesfatsion, Leigh S.

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Abstract

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated market design - the Wholesale Power Market Platform (WPMP) – for common adoption by all U.S. wholesale power markets. Versions of the WPMP have been implemented in New England, New York, the mid-Atlantic states, the Midwest, and the Southwest, and California. Strong opposition to the WPMP persists among some industry stakeholders, however, due largely to a perceived lack of adequate performance testing. This study reports on the model development and open-source implementation (in Java) of a computational wholesale power market organized in accordance with core WPMP features and operating over a realistically rendered transmission grid subject to congestion effects. The traders within this market model are strategic profit-seeking agents whose learning behaviors are based on data from human-subject experiments. Our key experimental focus is the complex interplay among structural conditions, market protocols, and learning behaviors in relation to short-term and longer-term market performance. Findings for a dynamic 5-node transmission grid test case are presented for concrete illustration. Annotated pointers to related work can be accessed here: http://www.econ.iastate.edu/tesfatsi/AMESMarketHome.htm

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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12649.

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Length: 37 pages
Date of creation: 27 Jul 2006
Date of revision:
Publication status: Published in Computational Economics, October 2007, Vol. 30, No. 3, pp. 291-327.
Handle: RePEc:isu:genres:12649

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Related research
Keywords: Wholesale power market restructuring; Empirical input validation; Market design; Behavioral economics; Learning; Market power; Agent-based modeling; AMES wholesale power market framework; Java; RepastJ.;

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Find related papers by JEL classification:
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
D8 - Microeconomics - - Information, Knowledge, and Uncertainty
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Paul L. Joskow, 2005. "Markets For Power In The United States - An Interim Assessment," Working Papers 0512, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research. [Downloadable!]
    Other versions:
  2. Nicolaisen, James & Petrov, Valentin & Tesfatsion, Leigh, 2001. "Market Power and Efficiency in a Computational Electricity Market with Discriminatory Double-Auction Pricing," Staff General Research Papers 1952, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  3. Widergren, Steven & Sun, Junjie & Tesfatsion, Leigh S., 2006. "Market Design Test Environments," Staff General Research Papers 12516, Iowa State University, Department of Economics. [Downloadable!]
  4. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July. [Downloadable!] (restricted)
  5. Sun, Junjie & Tesfatsion, Leigh S., 2007. "Open-Source Software for Power Industry Research, Teaching, and Training: A DC-OPF Illustration," Staff General Research Papers 12775, Iowa State University, Department of Economics. [Downloadable!]
  6. Axelrod, Robert & Tesfatsion, Leigh S., 2006. "A Guide for Newcomers to Agent-Based Modeling in the Social Sciences," Staff General Research Papers 12515, Iowa State University, Department of Economics. [Downloadable!]
  7. Bower, John & Bunn, Derek, 2001. "Experimental analysis of the efficiency of uniform-price versus discriminatory auctions in the England and Wales electricity market," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 561-592, March. [Downloadable!] (restricted)
  8. Sun, Junjie, 2005. "U.S. Financial Transmission Rights: Theory and Practice," Staff General Research Papers 12266, Iowa State University, Department of Economics. [Downloadable!]
  9. Koesrindartoto, Deddy & Sun, Junjie & Tesfatsion, Leigh S., 2005. "An Agent-Based Computational Laboratory for Testing the Economic Reliability of Wholesale Power Market Designs," Staff General Research Papers 12388, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  10. Paul Windrum & Giorgio Fagiolo & Alessio Moneta, 2007. "Empirical Validation of Agent-Based Models: Alternatives and Prospects," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 10. [Downloadable!]
  11. Leigh Tesfatsion, 2002. "Agent-Based Computational Economics," Computational Economics 0203001, EconWPA, revised 15 Aug 2002. [Downloadable!]
  12. Sun, Junjie & Tesfatsion, Leigh S., 2006. "DC Optimal Power Flow Formulation and Solution Using QuadProgJ," Staff General Research Papers 12558, Iowa State University, Department of Economics. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yu, Nanpeng & Liu, Chen-Ching & Tesfatsion, Leigh S., 2008. "Modeling of Suppliers Learning Behaviors in an Electricity Market Environment," Staff General Research Papers 12976, Iowa State University, Department of Economics. [Downloadable!]
  2. Giorgio Fagiolo & Andrea Roventini, 2008. "On the Scientific Status of Economic Policy: A Tale of Alternative Paradigms," LEM Papers Series 2008/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
    Other versions:
  3. Widergren, Steven & Sun, Junjie & Tesfatsion, Leigh S., 2006. "Market Design Test Environments," Staff General Research Papers 12516, Iowa State University, Department of Economics. [Downloadable!]
  4. Eric Guerci & Stefano Ivaldi & Silvano Cincotti, 2008. "Learning Agents in an Artificial Power Exchange: Tacit Collusion, Market Power and Efficiency of Two Double-auction Mechanisms," Computational Economics, Springer, vol. 32(1), pages 73-98, September. [Downloadable!] (restricted)
  5. Sun, Junjie & Tesfatsion, Leigh S., 2007. "An Agent-Based Computational Laboratory for Wholesale Power Market Design," Staff General Research Papers 12776, Iowa State University, Department of Economics. [Downloadable!]
  6. Sun, Junjie & Tesfatsion, Leigh S., 2007. "Open-Source Software for Power Industry Research, Teaching, and Training: A DC-OPF Illustration," Staff General Research Papers 12775, Iowa State University, Department of Economics. [Downloadable!]
  7. Li, Hongyan & Sun, Junjie & Tesfatsion, Leigh S., 2009. "Separation and Volatility of Locational Marginal Prices in Restructured Wholesale Power Markets," Staff General Research Papers 13075, Iowa State University, Department of Economics. [Downloadable!]
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This page was last updated on 2009-11-21.


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