A reconfigurable power market simulator for reform studies on the electricity supply industry

In Hong Kong, electricity is currently supplied by two investor-owned utilities operating with a vertically integrated structure. There is no direct competition in these utilities' electricity supply businesses and their operations are separately regulated under agreements known as Schemes of Control (SOC) with the government. The government has recently issued a public consultation paper for seeking views on the future electricity market development after the current SOC expiring in 2008. Reformation of the Hong Kong electricity market will certainly be benefited by taking into account worldwide experiences. Specifying and creating new market rules governing the operation of the energy markets is a major challenge since these markets have exhibited wide variation in form and operational characteristics. Computer simulation has been recognized a useful approach for examining the impact and behavior of different market structures. This paper addresses this concern by developing a model of generic power market simulator capable of rapid reconfiguration to match different market rules. The design of the simulator will be adapted to analyze the effectiveness of alternative electricity market reforms in Hong Kong and to be useful for studies of the established market to cope with investigation of proposed rule changes required from time to time^..