A Preliminary Study on Incentive Compatible Bidding Mechanism for Electricity Market with Separated Power Transmission and Distribution

To make the power generation companies, power distribution companies and large customers announce the real operational parameter in day-ahead market, on the basis of mechanism design theory a mathematical model of incentive compatible bidding mechanism for electricity market with separated power transmission and distribution is constructed, and the incentive compatibility feature of the constructed model is proved. Taking an electricity market involving five generation companies, three distribution companies and three large customers for example, the basic features of the proposed bidding mechanism are illustrated by Monte Carlo simulation.