Keywords
mechanism design; counter‑intuitive; zonal pricing; incentive compatibility
Abstract
Considering factors such as the dynamic, systematic, and long‑term nature of the electricity market, there are often many counter‑intuitive issues, the correct inferences contradict people's intuitions. In this regard, taking the zonal pricing mechanism as an example, counterintuitive issues within the electricity pricing mechanism are explored. Firstly, based on mechanism design theory, Firstly, based on mechanism design theory, the incentive compatibility issues in mechanism design and their relationship with counter‑intuitive phenomena are analyzed. In response to the dynamic characteristics of market participants, an analytical approach that combines static and dynamic analyses is presented for addressing counterintuitive issues. Finally, using the generation‑side nodal weighted average price as the settlement price as the example, a simulation analysis on potential counter‑intuitive issues arising from the mentioned mechanism is carried out from both the static and dynamic perspectives. The results indicate that under this mechanism, due to some market participants declaring prices based on individual rationality, it does not necessarily lead to a reduction in electricity procurement costs. To address this, there is a need to design corresponding cost compensation and sharing mechanisms for such units, ensuring compliance with incentive compatibility constraints in the market.
DOI
10.19781/j.issn.1673-9140.2023.06.003
First Page
20
Last Page
33
Recommended Citation
LONG, Suyan; SONG, Yuhui; LIU, Yuming; ZHANG, Tianbao; JI, Tianyao; and JING, Zhaoxia
(2024)
""Counter‑intuitive" issues in electricity pricing mechanism from the perspective of zonal pricing methods: research methodology and agent‑based simulation analysis,"
Journal of Electric Power Science and Technology: Vol. 38:
Iss.
6, Article 3.
DOI: 10.19781/j.issn.1673-9140.2023.06.003
Available at:
https://jepst.researchcommons.org/journal/vol38/iss6/3