Simulation of Hydro Power Plants in the Iberian Market using an Agent-Based Model and Q-Learning

This paper presents the results of an Agent-Based Model developed to simulate the Iberian Electricity Market, with special focus on the modelling of hydro power plants. To simulate the agent's dynamics in the day-ahead market, it was developed a bidding strategy based on a Q-Learning procedure. In the computation area, the recent years brought the discussion around artificial intelligence to a new upper level to complement traditional models, driven by the increased hardware computer capabilities, as well as new developments in the machine learning area. Reinforcement Learning models, as Q-Learning, are being widely used to represent complex systems such as electricity markets. The developed model is designed to simulate in a detailed way the hydro units that have a large impact in the electricity market common to Portugal and Spain. Apart from describing the developed model, this paper also includes results from its application to the Iberian Market case along 2018.