Analysis and modeling of market design and mechanism design in transactive energy

Transactive energy is an interdisciplinary synthesis of power system engineering, economics, and computer science. The basic economic principles of TE are straightforward applications of price theory and the supply/demand market model. Building on those basic principles to design TE systems that are implementable at scale requires a deeper understanding of a broader set of economic principles and theory.

These economic principles fall into three categories (in no particular order): mechanism design, auction theory, and market process economics. These three fields inform the institutional design for TE by focusing on questions of the greatest interest: enabling widespread participation, enabling participants to provide energy and grid services while maintaining grid balance, maximizing total surplus/gains from trade, aligning individual incentives and outcomes with system incentives and outcomes, incorporating the epistemic context in which individuals (and groups of individuals in various types of organizations) make choices, reducing the ability to benefit from exercising market power, and reducing the ability to manipulate market processes and outcomes.

This project will examine different institutional design choices targeting these questions, using GridLAB-D as an agent-based simulation platform. The simulations will abstract from the physical details of the distribution grid.