Agent Interactions & Mechanisms in Markets with Uncertainties: Electricity Markets in Renewable Energy Systems

Electricity consumption is highly correlated with the level of human development, which alongside electrification is expected to significantly increase global demand for electricity in the coming decades. In current electricity systems, most of the electricity is generated by large fossil-fuel power plants on-demand and it is distributed by centrally-managed electricity grids. The increasing demand for electricity, however, should not go hand in hand with the simultaneous intensification of fossil-fuel mine and use, which is a driving cause of rising average temperatures on Earth’s surface. Natural sources such as the sun and wind are expected to replace conventional sources of electricity, such as coal and gas power plants, in the near future, providing a key measure to address climate change and abate the effects of global warming. However, the intermittent and distributed nature of renewable electricity sources requires a redesign of conventional electricity grids that were originally designed following a top-down approach.