Abstract

The realization that natural resources are limited has triggered a global sustainability movement, including in the electricity sector. Sustainable electricity supply is within the national agenda of many countries given that the demand for electricity has shown a consistent increase over many decades. An important aspect of sustainable electricity supply is the pricing of electricity. The objective of this study is to explore the effectiveness of a competitive electricity market structure in the Indonesian case. While restructuring, deregulation and privatization in the electricity industry is aimed at improving efficiency in electricity supply and ensuring competitive electricity price, experiences from other countries indicate that competitive market can lead to high price volatility and gaming behavior among market players, leading to more expensive electricity price. This study proposes to use an agent based model to simulate a competitive market. The focus of the study has been on the installed generation capacity in the region to ensure availability of supply and competitive pricing. The study features the Java-Bali grid and uses the half-hourly demand data from the region to observe the pricing dynamics.

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