CAREER: Pricing Non-convexities Toward Transparency in Electricity Markets

尽管人们的意图是提供正确的信号来激励有效的市场结果，但由于经济学中的理想性凸性假设与发电机组运行特性的实际非凸性之间的差异，定价一直是电力市场设计中的一个主要挑战。已经采取了纠正措施，例如为收回成本而附带支付费用，但代价是损害透明度。透明度问题一直是利益相关者一直关注的问题：市场机制背后的理论基础不清楚，和解过程含糊其辞，有效性证据不足，等等。虽然美国各地的电力批发市场在加州电力危机后进行了重新设计，但复杂的市场规则仍然存在许多模糊之处，导致许多旷日持久的诉讼。此外，包括虚拟交易在内的新兴市场机制可能会带来额外的博彩机会，缺乏透明度可能会进一步加剧这种机会。该项目旨在更好地了解和解决非凸性带来的定价挑战，从而提高电力市场设计的透明度。综合研究和教育活动，包括为残疾学生提供实践机会的能源沉浸周，将促进代表不足的少数群体参与STEM，改善STEM教育和教育者发展，提高公众能源素养和参与能效计划。这一五年计划的目标是建立分析框架，以了解、评估和适应不断演变的市场机制，朝着创建市场机制和提供政策建议的长期目标迈进，以提高电力市场的透明度，减少操纵，并最终提高电力市场的效率。鉴于基本的工程细节在决策过程中通常是高度抽象的，该项目将认识到电力系统中复杂的运行约束，并将其纳入经济建模，提升工程师在市场设计中的作用。本课题将采用工程学、经济学、运筹学和数据科学相结合的方法，推进电力市场设计中的以下几个方面的知识：(1)不同定价和提升方案组合的综合比较；(2)存在提升的策略竞价的博弈论建模和分析；(3)两结算、联网系统的数据驱动表征；(4)虚拟交易对效率影响的理论和实证评估；(5)虚拟交易的提升分配规则分析；这一奖项反映了NSF的法定使命，并通过使用基金会的智力优势和更广泛的影响审查标准进行评估，被认为值得支持。

Despite the intention of providing the right signals to incentivize efficient market outcomes, pricing has been a major challenge in electricity market design, due to the discrepancy between the idealistic convexity assumptions in economics and the practical non-convexities of the operating characteristics of generating units. Corrective measures have been adopted, such as side-payments for cost recovery, but at the expense of compromising transparency. The issue of transparency has been a persistent concern from the stakeholders: the rationale behind a market mechanism is unclear, the settlement process is obscure, the evidence of effectiveness is insufficient, and so forth. While the wholesale electricity markets throughout the U.S. have been redesigned after the California electricity crisis, there remain a lot of ambiguities arising from the sophisticated market rules, resulting in many long-lasting litigations. Moreover, emerging market mechanisms including virtual transactions may bring in additional gaming opportunities, which can be further exacerbated by the lack of transparency. This project aims to better understand and resolve the pricing challenges arising from non-convexities, thus enabling more transparency in electricity market design. The integrated research and education activities, including the Energy Immersion Week which provides hands-on opportunities for students with disabilities, will promote the participation of underrepresented minorities in STEM, improve STEM education and educator development, and increase public energy literacy and engagement in energy efficiency programs.The goal of this five-year project is to build analytical frameworks to understand, evaluate, and adapt the evolving market mechanisms, toward the long-term goal of creating market mechanisms and providing policy recommendations that enhance the transparency, reduce the manipulation, and ultimately improve the efficiency of electricity markets. Given that the underlying engineering details are typically highly abstracted in policymaking, this project will recognize and incorporate the intricate operational constraints in power systems into economic modeling, elevating the role of engineers in market design. Following a convergence approach of engineering, economics, operations research, and data science, this project will advance the state of knowledge in electricity market design regarding: (1) comprehensive comparison of different combinations of pricing and uplift schemes; (2) game-theoretic modeling and analysis of strategic bidding in the presence of uplift; (3) data-driven characterization of two-settlement, networked systems; (4) theoretical and empirical evaluation of the efficiency impact of virtual transactions; (5) analysis of uplift allocation rules for virtual transactions; and (6) design of financial instruments and operating paradigms for increased situational awareness.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.