Business School


Simulations of wind in electricity markets

Simulations of wind in electricity markets (SWEM) is the University of Auckland Energy Centre’s simulation model of the New Zealand Electricity Market designed to forecast short-run electricity prices in the market.

SWEM: The University of Auckland Energy Centre’s electric market simulator


SWEM uses an agent-based model to predict the extent to which generators can price above short-run marginal cost in the market, given a variety of constraints including transmission capacity and losses, generator outages, water storage levels, and the demand-supply balance in the market at any given time.

The Energy Centre employs SWEM for a variety of studies into New Zealand electricity policy, including asset swaps, the value of transmission improvements, and the impact of intermittent generation in the market.

Although SWEM stands for "Simulations of Wind in Electricity Markets", the model’s uses extend far beyond that. SWEM has also been used to research methodological questions in the area of agent-based modelling.

SWEM is built up on a comprehensive dataset of the New Zealand electricity market, combined with a dispatch model solved using CPLEX. The model uses a 19 node aggregation of the 244 node actual grid, complete with transmission constraints, losses and loop flows. The model draws upon the same dataset of generators and their costs as used by the Electricity Authority’s GEM model, which has been enhanced with additional data on historical water storage levels, wind speeds and solar data. This attention to detail distinguishes SWEM from other academic models using agent-based algorithms.

SWEM started its first simulations in 2010 and has seen considerable use since by Energy Centre researchers and students.

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Papers and dissertations using SWEM


Chan, Kin, Evaluation of the Impact of Electric Vehicles on the NZ Electricity Market, University of Auckland Department of Economics Honours Dissertation, 2009.

Joyce, Sophie, Comparing Agent Learning Algorithms in a Transmission Constrained Electricity Network, University of Auckland Masters Thesis, 2010.

Gussen, Ben, The Impact of Wind Penetration on the New Zealand Electricity Market, University of Auckland Department of Economics Honours Dissertation, 2010.

Browne, O., Poletti, S., and Young, D. Simulating Market Power in the New Zealand Electricity Market, New Zealand Economic Papers 46:1 35-50, 2012. Download the paper from the Taylor and Francis Online website.

Browne, O., Poletti, S., and Young D. A Critique of Wolak’s Evaluation of the NZ Electricity Market Afterword: A Rejoinder, New Zealand Economic Papers 46:1 53-55, 2012. Download the paper from the Taylor and Francis Online website.

Young, D., Poletti, S., and Browne, O., Can Agent-Based Models Forecast Spot Prices in Electricity Markets? Evidence from the New Zealand Electricity Market, 2012, In submission at Energy Economics. Download the paper from the SSRN website.

Lau, Yan Na, The Impact of PHEVs Penetration on the New Zealand Electricity Market, University of Auckland Department of Economics Honours Dissertation, Expected 2012.

Jiang, Yewen, Modelling the New Zealand Electricity Prices with Inflows, University of Auckland Department of Economics Honours Dissertation, Expected 2012.

Rawat, Himanshu, The Impact of Solar Power on the New Zealand Electricity Market, University of Auckland Department of Civil Engineering Honours Dissertation, In Progress.

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SWEM research team (from 2012)


  • Dr Stephen Poletti, Research Lead.
  • Dr David Young, Modelling Lead.
  • Dr Anthony Downward, Modelling Consultant.
  • Oliver Browne, Research Assistant.
  • Vladimir Kuzmanoski, Research Assistant.
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Contact us


For more information please contact:

Dr Stephen Poletti
Phone: +64 9 923 7664
Email: s.poletti@auckland.ac.nz

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