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Auction games for coordination of large-scale elastic loads in deregulated electricity markets

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  • Auctions, e.g. market clearing price (MCP) auctions, have been widely adopted in electricity markets, and progressive second price (PSP) auctions are stated possessing promising properties of incentive compatibility and efficiency. In this work, we study the coordination of large-scale elastic loads in deregulated electricity markets under MCP and PSP auctions. To explore the performances of these auctions in the underlying problems, we focus on the key issues of the payment comparison, incentive compatibility and efficiency of Nash equilibrium (NE), and develop the following results: (i) The individual payment under MCP is always higher than that under PSP, and their difference vanishes asymptotically as the system scale increases; (ii) The incentive compatibility holds under PSP, and holds under MCP only with respect to others' efficient bid profile; (iii) The efficient bid profile under PSP is an NE, while that under MCP is an $\varepsilon$-NE which degenerates to an NE asymptotically as the system scale increases. With these analyses, we claim that it is pretty promising to apply both MCP and PSP auctions to the large-scale load coordination problems in deregulated electricity markets.
    Mathematics Subject Classification: Primary: 91B26; Secondary: 91B32.


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