Default broker and game design

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Default broker and game design

grampajohn
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We clearly need a default broker, it seems, to be the broker behind the default tariff. The game-design question is: What, exactly, does the default broker do besides offer the default tariff? Presumably customers must be billed for their usage under this tariff, and that means power must be provided. Does the default broker trade in the market for the power needed to service the default tariff? If so, then its trading strategy needs to be simple, fixed, and documented. It will be the largest player in the market initially, and so its bidding behavior could have a big impact on the market. Presumably the default broker also must engage the balancing market, and its imbalance should not have a predictable bias, nor should it be extremely volatile.

David built a sample broker last fall with a simple, well-defined trading strategy that should achieve balance in expectation, but that strategy depended on load predictions that we may not have now, because we are using simulated customers rather than a predefined data stream.

I'm not sure I have a crisp answer for this at the moment. Ideas would be more than welcome.

John
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AW: Default broker and game design

chris.flath

Since yesterday I am down with a major cold / flu and currently not completely up to this task. I remember, however, that initially (probably at INFORMS in Austin) we discussed that the default tariff (not default broker) could just be offered by the DU – i.e. the local energy provider who does the balancing anyhow.

 

This is motivated by the idea that prior to the brokers being active in this (e.g. newly liberalized) regional market all Customers are served by the DU, anyhow. That means the DU is currently offering default feed-in tariffs (probably differentiated by power source) and default consumption tariffs. In this setup the DU is anyhow filling gaps and spikes with its central balancing capacities and is not actively trading energy but only serving its customers.

 

I am sure for a minimal working environment we could just have a broker that does not care about balancing payments as it is effectively a subunit of the DU receiving the balancing payments. The idea is anyhow that the rates offered are somewhat non-competitive – i.e. too high for consumption, too low for production – and hence do not attract many customers.

 

Chris

 

Von: grampajohn [via Power TAC Developers] [mailto:ml-node+[hidden email]]
Gesendet: Samstag, 19. März 2011 03:43
An: Christoph Flath
Betreff: Default broker and game design

 

We clearly need a default broker, it seems, to be the broker behind the default tariff. The game-design question is: What, exactly, does the default broker do besides offer the default tariff? Presumably customers must be billed for their usage under this tariff, and that means power must be provided. Does the default broker trade in the market for the power needed to service the default tariff? If so, then its trading strategy needs to be simple, fixed, and documented. It will be the largest player in the market initially, and so its bidding behavior could have a big impact on the market. Presumably the default broker also must engage the balancing market, and its imbalance should not have a predictable bias, nor should it be extremely volatile.

David built a sample broker last fall with a simple, well-defined trading strategy that should achieve balance in expectation, but that strategy depended on load predictions that we may not have now, because we are using simulated customers rather than a predefined data stream.

I'm not sure I have a crisp answer for this at the moment. Ideas would be more than welcome.

John


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Re: AW: Default broker and game design

grampajohn
Administrator
Yes, we could have the default broker (the DU) sell energy to its customers without buying any, but that will have a big impact on the market. My concern is that brokers need to quickly learn about customers and about prices in the market, and if the DU is not buying the energy to serve its customers (and remember, DUs in the real world DO buy their power in the wholesale markets), then prices will be abnormally low early in the game, and brokers will underestimate their expected costs and therefore offer tariffs at unprofitable rates.

Brokers need to be able to observe aggregate load and the corresponding market prices and weather data from the beginning of the game if they hope to build reasonable portfolios.

John
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RE: AW: Default broker and game design

Wolf
Administrator

 

 

From: grampajohn [via Power TAC Developers] [mailto:[hidden email]]
Sent: Saturday, March 19, 2011 03:01 PM
To: Wolf Ketter
Subject: Re: AW: Default broker and game design

 

Yes, we could have the default broker (the DU) sell energy to its customers without buying any, but that will have a big impact on the market. My concern is that brokers need to quickly learn about customers and about prices in the market, and if the DU is not buying the energy to serve its customers (and remember, DUs in the real world DO buy their power in the wholesale markets), then prices will be abnormally low early in the game, and brokers will underestimate their expected costs and therefore offer tariffs at unprofitable rates.

Yes, I agree. Without the DU buying energy we could create a kind of secondary market that we don’t want, since it could change the nature of the game dramatically, and the burn-in period for the brokers would be too long. The DU should buy their power at the wholesale market.


Brokers need to be able to observe aggregate load and the corresponding market prices and weather data from the beginning of the game if they hope to build reasonable portfolios.

Yes, this is especially important for the people who would like to concentrate on machine learning issues in the competition, so that they can learn patterns in the transactional data (which should be a big proportion of the participants).

Thanks,

Wolf



John


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