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By S. A. Boggs, R. Y. Chu, N. Fujimoto

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Some bidding schemes require full “multi-part” bids. Others require single-part bids for energy, and either simultaneous or sequential bids for the ancillary and IOS services. (b) Individual for-profit MPs aim to improve their short- and long-term market positions through various strategies for increasing their profits, controlling their market share, and/or other objectives. , day-ahead and same-day) scheduling their main focus is on profit maximization. ). (c) The new markets can become more or less effective through the existence of catalysts such as a power exchange, scheduling coordinators, energy brokers, service providers, e-commerce, and independent system operators.

Entry of generation, transmission capacity expansion, and demand-side bidding should lower prices and lessen volatility. The ancillary service markets have been more problematic. Reserve markets in particular have experienced price spikes and price inversions, reflecting the greater vulnerability of these markets to market power and to market design flaws that exacerbate strategic behavior [9,12]. Temporary price and bid caps and more permanent market re-designs should help solve some of these problems.

Given the complexity of the power system and hence the electric energy market, there is a need in our opinion for a simulation tool to help in the learning process. Such a tool must by necessity represent both the systematic and random parts of the process. From a modeling viewpoint, we have considered the following to be critical [1-8,13]: The power system under consideration should be modeled realistically. ) should be customized in accordance with the rules of the system under consideration.

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