**6. Main Features of the MATREM System**

MATREM (for Multi-Agent TRading in Electricity Markets) is an agent-based tool for simulating the behavior of competitive energy markets. In [9], we present a detailed description of the system, and in [10] we classify the system according to a number of dimensions associated with both electricity markets and intelligent agents. The remainder of this section gives an overview of MATREM.

The system supports a day-ahead market (DAM), an intra-day market (IDM), a futures market, and a balancing market (BM). The DAM is a central market where generation and demand are traded on an hourly basis [31]. The IDM is a short-term market that involves several auction sessions. Both markets operate according to the marginal pricing theory and are controlled by a market operator agent. Two pricing mechanisms are supported: system marginal pricing (SMP) and locational marginal pricing (LMP). The futures market is a market to hedge against the financial risk (i.e., the price volatility) associated with the DAM and the IDM. It is an organized market for both financial and physical products, which may span from days to years. The balancing market is a market for the provision of system services. MATREM considers three types of reserve, namely primary reserve, secondary reserve and tertiary reserve. The stability of the power system is a task associated with a system operator agent, who is responsible for the operation of this market.

The system also supports a marketplace for negotiating tailored (or customized) bilateral contracts, notably contracts defined to cover the delivery of large amounts of electrical energy over long periods of time. Two types of contracts are considered: forward contracts and contracts for difference [32]. The negotiating parties are equipped with a model that handles two-party and multi-issue negotiation. The negotiation process is an iterative process involving an exchange of offers and counter-offers [33–35].

Market participants are modeled as software agents and include generating companies, retailers, aggregators, traditional consumers, coalitions of consumers, market operators and system operators. VRE aggregators allow the participation of WPPs and other VRE producers in the aforementioned markets. Coalitions of consumers are essentially alliances of end-use customers with the main goal of increasing their bargaining power. The system platform is a 32/64-bit computer running the JAVA programming language and the JADE platform [36].
