Incentive Compatible Trading Mechanism for Double Auction Electricity Market

With the increasing proportion of renewable energy, there is an urgent need for flexible resources such as flexible loads to participate in power system dispatch. The goal of power market is to optimize the allocation of electricity resources, but currently the mechanism for demand-side resources to participate in market competition is not yet perfect. The locational marginal price mechanism widely used cannot solve the problems of asymmetric information and strategic bidding, which affect the efficiency of resource optimization. Therefore, on the basis of the VCG design theory, a clearing mechanism for flexible loads participating in the double auction market is proposed. It conforms to incentive compatibility, individual rationality, and social utility maximization simultaneously. Then, a pricing correction strategy based on clearing energy is proposed to address the issue of settlement imbalance caused by the VCG mechanism. Finally, case studies based on the improved IEEE30-bus system are done, validate the effectiveness of the proposed method.