Extending a Spot Market Multi-Agent Simulator to Model Investment Decisions

For several years, EPRI has been developing a multi-agent simulator for spot electricity markets called STEMS. We present here an extension, jointly developed by EPRI and EDF, of this simulator to handle investment decisions in new generation capacity. This extension is applied to a case study inspired from real market data, to demonstrate the use of these simulations for analyzing interactions between long and short-term decisions of strategic profit-maximizing agents. We also use an elementary example to observe the impact of varying market structures, pertaining to new entry or to the level of forward contracting. Agent-based modeling provides a flexible framework able to deal with the complexity of real-world situations. Our view is that such agent-based simulations should henceforth become an essential component of the objective evaluation of candidate resource adequacy policies