Impact of cyber-security breach to price signals on power market: An experimental human simulation

The market power is a term defined in power economics as a potential to make the electric power market volatile. A supplier having the market power has an opportunity to speculate on the market clearing price. Observance of the market power may be destructive for the system only if a supplier actually exercises its potential. Although there are several studies on the assessment of market power, there is no study showing the consequences if a supplier stealthy exercises its market power. In order to fill this gap in the literature, a multi-player electric market game is developed and a realistic market environment is simulated with the participation of engineering students. Mainly the cyber-security issue in conjunction with the market power is focused in this study. For a limited number of periods, price information is intentionally corrupted via cyber-attack to create a misbelief at the supplier side. The analysis of the results showed that if a participant is under the impression of possessing the market power regardless actual possession, he/she would try to exercise it to raise its profit, and as a result, market clearing price starts to fluctuate.