Showing papers on "Bidding published in 2022"

Short-Term Electricity Prices Forecasting Using Functional Time Series Analysis

Abstract: In recent years, efficient modeling and forecasting of electricity prices became highly important for all the market participants for developing bidding strategies and making investment decisions. However, as electricity prices exhibit specific features, such as periods of high volatility, seasonal patterns, calendar effects, nonlinearity, etc., their accurate forecasting is challenging. This study proposes a functional forecasting method for the accurate forecasting of electricity prices. A functional autoregressive model of order P is suggested for short-term price forecasting in the electricity markets. The applicability of the model is improved with the help of functional final prediction error (FFPE), through which the model dimensionality and lag structure were selected automatically. An application of the suggested algorithm was evaluated on the Italian electricity market (IPEX). The out-of-sample forecasted results indicate that the proposed method performs relatively better than the nonfunctional forecasting techniques such as autoregressive (AR) and naïve models.

EdgeDR: An Online Mechanism Design for Demand Response in Edge Clouds

Abstract: The computing frontier is moving from centralized mega datacenters towards distributed cloudlets at the network edge. We argue that cloudlets are well-suited for handling power demand response to help the grid maintain stability due to more flexible workload management attributed to their distributed nature. However, they also require computing demand response to avoid overload and maintain reliability. To this end, we propose a novel online market mechanism, EdgeDR, to achieve cost efficiency in edge demand response programs. At a high level, we observe that the cloudlet operator can dynamically switch on/off entire cloudlets to compensate for the energy reduction required by the power grid or provide enough computing resources to the edge service. We formulate a long-term social cost minimization problem and decompose it into a series of one-round procurement auctions. In each auction instance, we propose to let the cloudlet tenants bid with cost functions of their two-dimension service quality degradation tolerance, and let the cloudlet operator choose the service quality, manage the workload, and schedule the cloudlet activation status. In addition, we present a dynamic payment mechanism for the operator to balance the tradeoff between short-term profit and long-term benefit in more practical scenarios. Via rigorous analysis, we exhibit that our bidding policy is individually rational and truthful; our workload management algorithm has near-optimal performance in each auction; and our overall online algorithm achieves a provable competitive ratio. We further confirm the performance of our mechanism through extensive trace-driven simulations.

Extreme Gradient Boosting-Based Machine Learning Approach for Green Building Cost Prediction

Abstract: Accurate building construction cost prediction is critical, especially for sustainable projects (i.e., green buildings). Green building construction contracts are relatively new to the construction industry, where stakeholders have limited experience in contract cost estimation. Unlike conventional building construction, green buildings are designed to utilize new technologies to reduce their operations’ environmental and societal impacts. Consequently, green buildings’ construction bidding and awarding processes have become more complicated due to difficulties forecasting the initial construction costs and setting integrated selection criteria for the winning bidders. Thus, robust green building cost prediction modeling is essential to provide stakeholders with an initial construction cost benchmark to enhance decision-making. The current study presents machine learning-based algorithms, including extreme gradient boosting (XGBOOST), deep neural network (DNN), and random forest (RF), to predict green building costs. The proposed models are designed to consider the influence of soft and hard cost-related attributes. Evaluation metrics (i.e., MAE, MSE, MAPE, and R2) are applied to evaluate and compare the developed algorithms’ accuracy. XGBOOST provided the highest accuracy of 0.96 compared to 0.91 for the DNN, followed by RF with an accuracy of 0.87. The proposed machine learning models can be utilized as a decision support tool for construction project managers and practitioners to advance automation as a coherent field of research within the green construction industry.

Stochastic Cooperative Bidding Strategy for Multiple Microgrids With Peer-to-Peer Energy Trading

Abstract: It is a significant and challenging problem to coordinate multiple microgrids (MMGs) belonging to different entities and achieve their excellent energy-sharing performance to ensure the stability of electricity markets. This article studies a grid-oriented energy bidding problem for MMGs with peer-to-peer (P2P) energy trading under uncertainty. A stochastic Cartel game (SCG) based strategy is developed. A stochastic Cartel nonlinear programming model is formulated to characterize the joint energy bidding, the energy production, and P2P energy transactions while minimizing the total cost for MMGs under uncertainty. A diagonal quadratic approximation method is employed to linearize quadratic terms, and the SCG problem for MMGs is further decomposed into subproblems for individual MGs based on a surrogate Lagrangian relaxation method. The equivalence of problem transformation is proved and equilibrium solutions are derived in an iterative and distributed manner. Comparisons for different strategies, models, and solution algorithms are conducted to testify the rationality and validity of the proposed strategy.

Robust Screens for Noncompetitive Bidding in Procurement Auctions

Abstract: We document a novel bidding pattern observed in procurement auctions from Japan: winning bids tend to be isolated, and there is a missing mass of close losing bids. This pattern is suspicious in the following sense: its extreme forms are inconsistent with competitive behavior under arbitrary information structures. Building on this observation, we develop systematic tests of competitive behavior in procurement auctions that allow for general information structures as well as nonstationary unobserved heterogeneity. We provide an empirical exploration of our tests, and show they can help identify other suspicious patterns in the data.

A Transactive Energy Framework for Inverter-Based HVAC Loads in a Real-Time Local Electricity Market Considering Distributed Energy Resources

Abstract: Rapidly increasing distributed energy resources (DERs) bring more fluctuating output power to the distribution network and put forward a higher requirement on local regulation resources for maintaining the network's balance. Heating, ventilation, and air conditioning (HVAC) loads account for more than 40% of power consumption in modern cities and have huge regulation potential as flexible loads. However, HVACs equipped with inverter devices have rarely been studied for providing regulation services in the local electricity market (LEM), even though they have exceeded regular fixed-speed HVACs. To address this issue, this article proposes a real-time LEM and a distribution network's optimization framework to exploit the regulation potential of inverter-based HVACs considering multiple DERs. This LEM can avoid iterations in real time and significantly decrease the difficulty related to the participation of small end-users in urban distribution networks. Moreover, in this article, we propose a transactive capacity evaluation method to assist end-users in deciding their inverter-based HVACs regulation capacities in the real-time LEM, which considers buildings’ thermal features, users’ multiple comfort requirements, and dynamic ambient temperature. On this basis, a multilevel bidding strategy is developed for inverter-based HVACs to decrease energy cost, increase fluctuating DERs local utilization rate, and alleviate the distribution network's congestion. Finally, a realistic distribution network is utilized to verify the effectiveness of the proposed methods.

Optimal Price-maker Trading Strategy of Wind Power Producer Using Virtual Bidding

Abstract: This paper proposes a stochastic optimization model for generating the optimal price-maker trading strategy for a wind power producer using virtual bidding, which is a kind of financial tool available in most electricity markets of the United States. In the proposed model, virtual bidding is used to improve the wind power producer's market power in the day-ahead (DA) market by trading at multiple buses, which are not limited to the locations of the wind units. The optimal joint wind power and virtual trading strategy is generated by solving a bi-level nonlinear stochastic optimization model. The upper-level problem maximizes the total expected profit of the wind power and virtual bidding while using the conditional value at risk (CVaR) for risk management. The lower-level problem represents the clearing process of the DA market. By using the Ka-rush-Kuhn-Tucker (KKT) conditions, duality theory, and big- $M$ method, the bi-level nonlinear stochastic model is firstly transferred into an equivalent single-level stochastic mathematical program with the equilibrium constraints (MPEC) model and then a mixed-integer linear programming (MILP) model, which can be solved by existing commercial solvers. To reduce the computational cost of solving the proposed stochastic optimization model for large systems, a method of reducing the number of buses considered for virtual bidding is proposed to simplify the stochastic MPEC model by reducing its decision variables and constraints related to virtual bidding. Case studies are performed to show the effectiveness of the proposed model and the method of reducing the number of buses considered for virtual bidding. The impacts of the transmission limits, wind unit location, risk aversion parameters, wind power volatility, and wind and virtual capacities on the price-maker trading strategy are also studied through case studies.

An overview of wind energy development and policy initiatives in India

Abstract: The Indian renewable energy sector has grown at a compounded annual growth rate of 15.51% in the last five years, where wind growth is about 8%. The Indian government has been adopting changes to create a safe, cheap, and sustainable energy system to fuel vigorous economic growth. The government has made significant efforts in ensuring universal access to energy, giving power to its residents. It is implementing a large-scale deployment of renewable energy, particularly solar and wind. This paper examines the country's wind sector in-depth, including the government policy, financial incentives, and accomplishments. The study goes on to discuss the prospects and problems of the wind sector, as well as solutions to overcome them to reach the estimated target of 140-150 GW by 2030. Wind power growth in the country has weakened in the last few years which may hamper the country's ambitious renewable energy targets. Wind industry is facing several hindrances ranging from discontinuation of incentives, land acquisition, DISCOM's poor health, change in bidding scheme, old wind sites, etc. Certain steps, such as repowering outdated wind farms, giving generation-based incentives, tax concessions, reassessing the country's wind potential, and constructing competitive renewable energy zones could aid in reviving the wind energy sector.

Auction Design in an Auto-bidding Setting: Randomization Improves Efficiency Beyond VCG

Abstract: Auto-bidding is an area of increasing importance in the domain of online advertising. We study the problem of designing auctions in an auto-bidding setting with the goal of maximizing welfare at system equilibrium. Previous results showed that the price of anarchy (PoA) under VCG is 2 and also that this is tight even with two bidders. This raises an interesting question as to whether VCG yields the best efficiency in this setting, or whether the PoA can be improved upon. We present a prior-free randomized auction in which the PoA is approx. 1.896 for the case of two bidders, proving that one can achieve an efficiency strictly better than that under VCG in this setting. We also provide a stark impossibility result for the problem in general as the number of bidders increases – we show that no (randomized) anonymous truthful auction can have a PoA strictly better than 2 asymptotically as the number of bidders per query increases. While it was shown in previous work that one can improve on the PoA of 2 if the auction is allowed to use the bidder’s values for the queries in addition to the bidder’s bids, we note that our randomized auction is prior-free and does not use such additional information; our impossibility result also applies to auctions without additional value information.