In Part I, two pool-based electricity market models are compared in terms of their economic impact on the market participants, the Lossless Economic Dispatch (LED) and the Optimal Power Flow (OPF). The OPF is shown to be economically more efficient, more accurate and more equitable to the participants.; In Part II, a stochastic electricity market simulator (SEMS) is designed using elements of Monte Carlo methods and game theory. Each generator is assumed to operate in a stochastic manner, according to a bid strategy composed of a set of pre-established bid instances and a corresponding set of bid probabilities. The Pool dispatches power and defines prices according to either the LED or OPF models from Part I. Generators can update their bidding strategies according to a profit performance index reflecting their degree of risk tolerance, Chicken (risk averse), Average, and Cowboy (risk taker). SEMS can predict issues such as unintended collusion, as well as to evaluate bidding strategies.
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