The Role of Strategic Load Participants in Two-Stage Settlement Electricity Markets

2019/03/20 by Pengcheng You, You, Pengcheng, Dennice F. Gayme +3
Decision Sciences · Engineering · #Auction Theory and Applications #Electric Power System Optimization #FOS: Economics and business #FOS: Mathematics #Optimization and Control (math.OC) #Smart Grid Energy Management #Theoretical Economics (econ.TH)

paper · pdf · doi:10.48550/arxiv.1903.08341

openalex publication_date 2019/03/20 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

Two-stage electricity market clearing is designed to maintain market efficiency under ideal conditions, e.g., perfect forecast and nonstrategic generation. This work demonstrates that the individual strategic behavior of inelastic load participants in a two-stage settlement electricity market can deteriorate efficiency. Our analysis further implies that virtual bidding can play a role in alleviating this loss of efficiency by mitigating the market power of strategic load participants. We use real-world market data from New York ISO to validate our theory.

Citations

• Virtual bidding and electricity market design

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