Gaming Behavior in Wholesale Electricity Markets with Active Demand Response

Consumers can become more active players in wholesale electricity market with demand response (DR) programs. This paper focuses on the gaming behavior analysis both on supply side and demand side when dynamic pricing introduced in wholesale electricity markets. To highlight the different demand flexibility and response ability of different customers, the optimal response strategies of three kinds of demand response programs are modeled separately. The optimal bidding strategies of supply side are formulated as linear supply function (LSF) bidding. Then this paper presents the market clearing model by a minimum cost unit commitment method and equilibrium results of supply and demand side real-time response to dynamic pricing by a repeated gaming framework. Finally, the gaming behaviors of different types of consumers and different capacities of generators are discussed by study cases.