Computing competitive equilibrium in Pay- as- Bid Auction

Electricity Industry is one of the effective industries on socio- economic condition of society. This industry received as public service for years so it was monopolistic. Due to the global trend to restructuring and also the problems of traditional monopoly system, Electricity Market with the aim of increasing efficiency and reducing cost has been setup. Increasing efficiency and constructing a competitive market is one of the most important goals of restructuring. Thus, the aim of this paper is estimating competitive equilibrium under pay as bid market by Iranian electricity market data. Note that competitive equilibrium under pay as bid is different with uniform. In this paper, this structural difference is considered and competitive benchmark for pay as bid market is gained. For this purpose, based on microeconomic principles, a mathematical model is used to find competitive equilibrium under this mechanism and then by the realistic data of Iranian electricity market, competitive equilibrium for all intervals in 2012 is estimated. By running this model, competitive price is obtained and compared to real prices of market. Based on the results, competitive equilibrium in this auction is different with marginal cost. Also the real results of market are different from competitive equilibrium in different intervals of study.