Bidding behaviors of coal-fired units in China's electricity market considering previous capacity revenues based on prospect theory

The capacity market is a key tool for ensuring the capacity adequacy and the stability of the novel power system proposed by Chinese government. After introducing capacity market, the bidding behaviors of coal-fired generation units in the electricity market will inevitably be affected by previous capacity revenues. Additionally, there is a significant difference in the operational efficiency of coal-fired units with different technical characteristics in the electricity market. This paper innovatively considers these two factors and proposes a bidding strategy model for coal-fired generation units based on prospect theory and the multi-agent deep reinforcement learning algorithm to explore the impact of previous capacity revenues on monthly electricity market. The economic and environment consequence under different capacity market access mechanisms are evaluated and compared. The results demonstrate that high-efficient units may fail to win bids due to their aggressive bidding strategies, thereby being unable to leverage their technological advantages. After introducing capacity market, the profit per kilowatt-hour of units has increased by 3.31 %, while the carbon emissions have decreased. In addition, different market access mechanisms should be adopted in the capacity market at different stages of market development, which could provide scientific reference for the policymakers to improve the market system.