An Adaptive Game for Electricity Markets

Abstract: In the present paper we describe an adaptive game applied in a deregulated power market consisting of an Independent System Operator (ISO) and Power Generators (Players) who submit their offers to the ISO in the form of curves. The ISO purchases energy from the generators, starting from the more economical offer in order to cover the electricity demand. The power generators do not know the costs, the offers and the payoffs of their competitors and therefore they use an adaptive learning tool to compensate their lack of knowledge trying to maximize their profit. Sequential iterations of the game are being executed with different parameter settings in order to study mainly the impact of the number of participants on the market’s clearing price in parallel with the way they alter their offers during the game. After repeated runs of the simulation model under specific market rules and conditions, many interesting phenomenona have been observed regarding the behavior of the players and the stability of the market