The efficiency-equity trade-offs in day-ahead electricity market auctions

Ceyhan G., Köksalan M., Lokman B.

Journal of the Operational Research Society, 2026 (SCI-Expanded, SSCI, Scopus)

  • Yayın Türü: Makale / Tam Makale
  • Basım Tarihi: 2026
  • Doi Numarası: 10.1080/01605682.2026.2703648
  • Dergi Adı: Journal of the Operational Research Society
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, IBZ Online, Periodicals Index Online, ABI/INFORM, Aerospace Database, Applied Science & Technology Source, Compendex, INSPEC, zbMATH, Business Source Ultimate (EBSCO), Engineering Source (EBSCO), Health Research Premium Collection (ProQuest), Materials Science & Engineering Collection (ProQuest), Technology Collection (ProQuest)
  • Anahtar Kelimeler: day-ahead electricity market, efficiency, equity, Multiple criteria analysis, nondominated set
  • Orta Doğu Teknik Üniversitesi Adresli: Evet

Özet

European day-ahead electricity markets (DAMs) operate as two-sided auctions where market operators solve a market clearing problem to match the supply and demand bids and determine the price of electricity for the following day. These markets are typically designed to maximise the total surplus of buyers and sellers. However, there is usually no market-clearing price maximising the surpluses of all participants simultaneously. Under these typical circumstances, considering only the total surplus leads to inequity as some bidders experience negative surplus or missed surplus. In this paper, we address these equity-efficiency concerns by developing a multi-objective optimisation approach to European DAMs. We characterise the nondominated set and explore the trade-offs among market loss, missed surplus, and market surplus. Through experiments on data representative of the Turkish DAM, we derive insights that can inform more equitable market designs across all DAMs. We also explore combinatorial auction variants of the problem to observe the characteristics of the nondominated sets under these settings.