An Agent Based Model for Optimal Generation Mix based on Price Elasticity of Aggregated Consumer Demand

This work has its interests in the relation between the generation mix within a power system and the elasticity of demand based on the prices emerging from the short term electricity market. The paper starts by describing a new agent-based modelling framework that involves electricity producers, consumers and suppliers as agents participating in a market environment. The framework allows for investigating the effect of demand elasticities on bidding of generators in the short term market and its influence on their revenue in the long term. We focus on the increasingly important issue of renewable technology such as wind generation and the volatility it brings into the electricity market. Specifically we investigate three scenarios with varying mix of generating technologies such as coal, gas and wind turbines and measure the aggregate demand response to signals such as the System Buy Prices (SBP) emerging out of the balancing market.