A Multi-Agent Model of the the UK Market in Electricity Generation

The modern trend in electricity industries around the world is towards increasing competition through deregulation and privatisation. For example, movement towards one large EU-wide market began in 1996 with EU Directive 96/92, which sets out common rules and targets concerning competition, unbundling and transparency. However, the particular nature of electricity generation and supply means some form of regulation and market mechanism based control of a privatised market will always be necessary. Decisions need to be made about the mechanisms governing the requirements to meet demand, to maintain the viability of the network and to ensure generators are paid correctly for power generated. Unfortunately, it is unclear what processes to use to achieve these goals while still delivering some benefit to the consumer in the form of reduced electricity costs. This Chapter summarises research on a project sponsored by the National Grid Company conducted in the period 1996-2000. This work is also described in [6, 5, 4, 3, 7]. The aim of this project was to examine the feasibility of using an autonomous adaptive agent model of the UK electricity generation market for gaining insights into the affects of certain market mechanisms on the competitors. Some background into the market for electricity is given in Section 2. In the UK in 2001 the New Electricity Trade Arrangement (NETA) came into force. NETA replaced the trading rules described in this Chapter. Details of NETA can be found at the Office of Gas and Electricity Markets website [17]. The fundamental differences between the new system and the old are: