Athanasios Papakonstantinou

Multi-dimensional procurement auction under uncertain and asymmetric information

This paper addresses two important issues in public procurement: ex ante uncertainty about the participating agents’ qualities and costs and their strategic behaviour. We present a novel multi-dimensional auction that incentivises agents to make a partial inquiry into the procured task and to honestly report quality-cost probabilistic estimates based on which the principal can choose the agent that offers the best value for money. The mechanism extends second score auction design to settings where the quality is uncertain and it provides incentives to both collect information and deliver desired qualities.

Price-maker wind power producer participating in a joint day-ahead and real-time market

The large scale integration of stochastic renewable energy introduces significant challenges for power system operators and disputes the efficiency of the current market design. Recent research embeds the uncertain nature of renewable sources by modelling electricity markets as a two-stage stochastic problem, co-optimizing day-ahead and real-time dispatch. In this framework, we introduce a bilevel model to derive the optimal bid of a strategic wind power producer acting as price-maker both in day-ahead and real-time stages. The proposed model is a Mathematical Program with Equilibrium Constraints (MPEC) that is reformulated as a single-level Mixed-Integer Linear Program (MILP), which can be readily solved. Our analysis shows that adopting strategic behaviour may improve producers expected profit as the share of wind power increases. However, this incentive diminishes in power systems where available flexible capacity is high enough to ensure an efficient market operation.

A robust optimisation approach using CVaR for unit commitment in a market with probabilistic offers

The large scale integration of renewable energy sources (RES) challenges power system planners and operators alike as it can potentially introduce the need for costly investments in infrastructure. Furthermore, traditional market clearing mechanisms are no longer optimal due to the stochastic nature of RES. This paper presents a risk-aware market clearing strategy for a network with significant shares of RES. We propose an electricity market that embeds the uncertainty brought by wind power and other stochastic renewable sources by accepting probabilistic offers and use a risk measure defined by conditional value-at-risk (CVaR) to evaluate the risk of high re-dispatching cost due to the mis-estimation of renewable energy. The proposed model is simulated on a 39-bus network, whereby it is shown that significant reductions can be achieved by properly managing the risks of mis-estimation of stochastic generation.

Population dynamics for renewables in electricity markets: A minority game view

The dominance of fluctuating and intermittent stochastic renewable energy sources (RES) has introduced uncertainty in power systems which in turn, has challenged how electricity market operate. In this context, there has been significant research in developing strategies for RES producers, which however typically focuses on the decision process of a single producer, assuming unrealistic access to aspects of information about the power system. This paper analyzes the behavior of an entire population of stochastic producers in an electricity market using as basis a minority game: the El Farol Bar problem. We illustrate how uncomplicated strategies based on a adaptive learning rules lead to the coordination among RES producers and a Pareto efficient outcome.

Information Uncertainty in Electricity Markets: Introducing Probabilistic Offers

We propose a shift from the current paradigm of electricity markets treating stochastic producers similarly to conventional ones in terms of their offers. We argue that the producers offers should be probabilistic to reflect the limited predictability of renewable energy generation, while we should design market mechanisms to accommodate such offers. We argue that the transition from deterministic offers is a natural next step in electricity markets, by analytically proving our proposals equivalence with a two-price conventional market.