A Multi-agent Approach to the Deregulation and Restructuring of Power Industry

Deregulation and restructuring of utility industry has been an important area for the past decade. Regulatory body, operation environment, technologies, definition of boundary, and the nature of electricity business have changed very fast. Therefore, it is very difficult and impossible to use the old rules or regulations, which were considered before the creation of computers, to manage and control the current power industry. In the past, production and distribution of electricity had been considered as natural monopoly due to the economic scale.

The new power plants and transmission systems could cost several billions of dollars. Such a franchise monopoly, under protection and isolated from competition, obviously has a much weaker incentive to control costs and avoid bad decisions. Therefore, we have been subject to excessive costs that were unjust and unjustifiable. For example, the bad decisions in 1970s is  the expansion of power gene ratio, the state of the art in the state of Washington is one of the best motivations to deregulate and restructure the energy industry is to avoid the same error.

As innovations in electrical engineering, materials science and supporting information technologies have developed rapidly, the low cost of generating and transporting electricity has become possible. As a result, several countries, Such as the United Kingdom, New Zealand, Norway, Chile and Argentina have taken significant steps towards the deregulation and privatization of their electric power industry. Production, transportation and distribution services were grouped into one commodity. After restructuring or deregulation, they could be treated as individual service providers and priced separately. As a result, more participants, many of whom have been excluded in making decisions on their behalf, could participate in the negotiations to create a more profitable and efficient market. The expansion of the power system was driven by the demand market. Security, reliability and economic issues must be separated so that the conflict of interest in the power distribution can be avoided. This was the best incentive for the development of the Independent System Operator (ISO). To ensure a smooth transition from the regulated and protected environment to a more open and competitive market, ISO may have a important role to play.  In a restructured market, structure of information and the decision-making process have become more decentralized and more distributed. As a result, the information processing and communication requirements between participants have been modified to reflect changes in the market structure. Decentralization of planning, management and operations has created a demand for new methods, models and technologies.

For example, a workshop was organized thanks to the joint efforts of Pserc (Energy System Engineering Research Center) and EPRI (Institute for Research in Electrical Energy) to identify the tools and systems in engineering and economics that necessary in the future. In such a decentralized market, each participant should be able to remain independent in a free and open market. In addition, they can be geographically dispersed the Internet and technology agents can support their communication, negotiation and coordination.

Internet technologies and agents can be used together to develop systems for planning and operating the utility market . However, the requirements on the support operation are much higher, because a decision must be made in a few seconds if there is a demand to balance the load. We will solve the operation problem in our future research. In this article, we focus on the planning phase of the system.

To prove that the Internet and multi-agent systems can be a new alternative to system expansion planning, we have developed an Internet-based multi-agent system to help participants better identify or more appropriate partnerships within the electricity market, such as suppliers and consumers. The core of the multi-agent system is a flexible multilateral trading system, developed on the basis of the bilateral value Shapley Value (BSV).


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