Modeling generation company decisions and electric market dynamics as discrete systems

Electric market dynamics (including quantity and price) is important to market design and reliability. Generation Companies (GENCOs) decision dynamics and interactions between them are the major source of market dynamics. This paper studies GENCOs decision dynamics as control problem and models electric market as control systems. Three kinds of GENCO decision-making processes are analyzed: probabilistic decision-making, learning effects during interactions with competitors, and a kind of complex decision-making. Based on these analyses, electric market is modeled respectively. Results shown this method can provide conclusions that are difficult or impossible to get by pure equilibrium analysis. The models can be used to study market properties, analyze interactions between GENCOs, and design control scheme.

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