After restructuring the power industry, choosing a proper auction rule has been considered as a
main challenge. Uniform price auctions and discriminatory (pay-as-bid) auctions have been
widely used. This paper tries to compare the costs of the Electricity market under uniform auction
and pay-as-bid auction using agent based modeling. Using Roth-Erev algorithm and based on the
data of Iran electricity market for 2014, cost of the electricity market has been simulated and
compared under the two auction mechanisms. According to the results under pay-as-bid auction,
diversion of players from their marginal costs is more likely mainly because of its settlement
rules. Since Iran's electricity market is ruled under pay-as-bid auction, revision in its auction
structure is recommended to the Electricity Market Regulatory Board.
Feshari M, Nazemi A, Farahi S. Comparative Analysis of Pay-as-Bid and Uniform Auctions in Iran's Electricity Market . Quarterly Journal of Energy Policy and Planning Research 2018; 4 (1) :99-133 URL: http://epprjournal.ir/article-1-326-en.html