Comparative study of pricing mechanisms and settlement methods in electricity spot energy market based on multi-agent simulation

Abstract

With the advancement of electricity market reform, eight pilot spot provinces in China have started electricity spot market trading. In the settlement rules of spot markets in each region, some areas apply nodal weighted average price to the settlement’s customer and supply sides. The economic incentive effect of the spot market pricing mechanism on market participants affects their bidding strategies. Therefore, based on the current research on electric spot market pricing mechanisms, this paper investigates the effects of bidding procedures and fairness of generator and consumption sides under three settlement mechanisms: locational marginal pricing, zonal pricing, and average system pricing. Through multi-agent-based electricity market simulation, the paper establishes a spot market clearing and settlement model to quantitatively analyze the impact of zonal settlement mechanisms on the interests of each market player. By validating analysis results, the paper makes suggestions for selecting electricity price mechanisms in China’s electric spot market environment.

Keywords

• Zonal pricing
• Agent-based simulation
• Electricity spot market
• Pricing mechanisms
• Settlement methods