MECHANISM DESIGN FOR INCENTIVE REGULATION IN ELECTRICITY MARKETS

In the restructured electricity industry,electricity markets are an oligopoly.We discuss some of the problems arising as a result of the
industry restructuring and the emerging smart grid. Such problems include generation expansion planning, integration of renewable energy
into the smart grid, multilateral trades among non-strategic regional transmission operators possessing asymmetric information, and energy
production coordination among strategic producers possessing asymmetric information. We formulate the generation expansion planning
problem, and a problem of energy procurement from a strategic seller with renewable and non-renewable resources. We use Mechanism
Design, a branch of microeconomic theory, to address these problems. We present the key ideas from Mechanism Design. If time permits,
we will present the solution to the problem of energy procurement from a strategic seller with renewable and non-renewable energy resources.