Constructing Electricity Market Models

TL;DR

This paper explores different mathematical models for electricity markets, including continuous, discrete, and fractional-order approaches, to better understand market dynamics and improve predictive accuracy.

Contribution

It introduces and compares continuous, discrete, and fractional-order models for electricity markets, highlighting their unique features and advantages.

Findings

Fractional-order models better capture memory effects.

Discrete models incorporate historical decision impacts.

Continuous models analyze long-term market trends.

Abstract

This working paper presents a comprehensive study on the development and analysis of various electricity market models, focusing on continuous, discrete, and fractional-order approaches. The continuous model captures the ongoing interactions between power producers and consumers using differential equations, providing insights into long-term trends and steady-state behaviors. The discrete model, suitable for analyzing scenarios where market events occur at specific time intervals, incorporates memory effects to account for historical behaviors and decisions, offering a realistic representation of short-term market dynamics. The fractional-order model introduces fractional calculus to capture memory effects and hereditary properties, enhancing the model's realism and predictive capability by reflecting the influence of past states on current market behavior.