Bilateral negotiations for electricity market by adaptive agent-tracking strategy
- Publisher:
- ELSEVIER SCIENCE SA
- Publication Type:
- Journal Article
- Citation:
- Electric Power Systems Research, 2020, 186
- Issue Date:
- 2020-09-01
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1-s2.0-S0378779620301966-main.pdf | Published version | 1.84 MB |
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© 2020 Bilateral transactions hedge both sides against uncertain price and volume risks of day-ahead auction and make up major portions of trading in electricity markets. Peer-to-peer bilateral transactions avoid broker fees but involve challenges of balancing between cooperative and competitive strategies for multi-round negotiations. To solve these challenges, this paper develops novel utility-based and adaptive agent-tracking strategies for bilateral negotiations. Relying on bilateral transaction volume and utility curves determined over a price range during unilateral pre-negotiation, utility-based strategies are developed for generation company (GenCo) agent (load serving entity (LSE) agent) to offer (bid) volumes and prices during multi-round bilateral negotiations. GenCo agent is also equipped with a new adaptive agent-tracking strategy that estimates reservation price of each LSE agent by Bayesian learning and updates the estimates in each round. The adaptive agent-tracking strategy facilitates cooperative yet competitive responses. Integration of new bilateral negotiation strategies with existing day-ahead auction in a renowned agent-based platform also enables combined simulation of the two market types. The case study demonstrates that the adaptive agent-tracking strategy empowers GenCoagents to swing bilateral negotiation results in their favor and yield 7% more payoff than the utility-based strategy, while achieving 100% improvement in frequency of failure of negotiation.
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