Dynamic Testing of Wholesale Power Market Designs: An Open-Source Agent-Based Framework

• Published in: Computational economics Vol. 30; no. 3; pp. 291 - 327
• Main Authors: Sun, Junjie, Tesfatsion, Leigh
• Format: Journal Article
• Language: English
• Published: Dordrecht Society for Computational Economics 01.10.2007; Springer Nature B.V
• Series: Computational Economics
• Subjects: Agent-based modeling; AMES wholesale power market framework; Applied economics; Behavior; Behavioral economics; Computational methods; Design; Economics; Electricity; Empirical input validation; Energy; Energy industry; Energy market; Experiments; Generators; Industrial organization; Java; Learning; Marginal pricing; Market design; Market planning; Market power; Model testing; Power; Principal-agent theory; Production capacity; RepastJ; Studies; Teaching; Tests; U.S.A; Validation studies; Wholesale; Wholesale power market restructuring; Wholesale prices
• ISSN: 0927-7099; 1572-9974
• DOI: 10.1007/s10614-007-9095-1

In April 2003 the U.S. Federal Energy Regulatory Commission proposed a complicated market design--the Wholesale Power Market Platform ( WPMP )--for common adoption by all US wholesale power markets. Versions of the WPMP have been implemented in New England, New York, the mid-Atlantic states, the Midwest, the Southwest, and California. Strong opposition to the WPMP persists among some industry stakeholders, however, due largely to a perceived lack of adequate performance testing. This study reports on the model development and open-source implementation (in Java) of a computational wholesale power market organized in accordance with core WPMP features and operating over a realistically rendered transmission grid. The traders within this market model are strategic profit-seeking agents whose learning behaviors are based on data from human-subject experiments. Our key experimental focus is the complex interplay among structural conditions, market protocols, and learning behaviors in relation to short-term and longer-term market performance. Findings for a dynamic 5-node transmission grid test case are presented for concrete illustration. [PUBLICATION ABSTRACT]