Optimal combinatorial electricity markets

Article type: Research Article

Authors: Penya, Yoseba K.^; | Jennings, Nicholas R.

Affiliations: Deusto Technology Foundation, University of Deusto, Mundaiz bidea 50 (20012), Donostia/San Sebastián, Basque Country | School of Electronics and Computer Science, University of Southampton, Southampton SO17 1BJ, United Kingdom

Note: [] Corresponding author. E-mail: [email protected].

Abstract: The deregulation of the electricity industry in many countries has created a number of marketplaces in which producers and consumers can operate in order to more effectively manage and meet their energy needs. To this end, this paper develops a new model for electricity retail where end-use customers choose their supplier from competing electricity retailers. The model is based on simultaneous reverse combinatorial auctions, designed as a second-price sealed-bid multi-item auction with supply function bidding. This model prevents strategic bidding and allows the auctioneer to maximise its pay-off. Furthermore, we develop optimal single-item and multi-item algorithms for winner determination in such auctions that are significantly less complex than those currently available in the literature.

Keywords: Multi-agent systems, distributed artificial intelligence, combinatorial auctions

DOI: 10.3233/WIA-2008-0133

Journal: Web Intelligence and Agent Systems: An International Journal, vol. 6, no. 2, pp. 123-135, 2008