From Uniform Auction to Discriminatory Auction: Assessment of the Restructuring Proposal for the Italian Electricity Day-Ahead Market
Title: From Uniform Auction to Discriminatory Auction: Assessment of the Restructuring Proposal for the Italian Electricity Day-Ahead Market
Series/Report no.: EUI RSCAS; 2009/69; Loyola de Palacio Programme on Energy Policy
In the context of the 2009 debate on reforming the Italian market, a realistic agent-based computational model of the day-ahead market session of the Italian wholesale electricity market is simulated to compare market performances between uniform-price and pay-as-bid clearing mechanisms. An empirical validation of computational results at a macro-level is performed to test for accuracy of simulated outcomes with historical ones. The level of prices are accurately reproduced except for few peak hours. As far as concerns pay-as-bid auction, the computational experiments point out that it results in higher market prices than the uniform-price auction. In the pay-as-bid mechanism, sellers’ endeavours to maximize their profits are more costly thus leading to higher price levels.
Subject: Electricity markets; agent-based computational economics; auction design; uniform auction; discriminatory auction; reinforcement learning
Type of Access: openAccess
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