Multi-Agent Reinforcement Learning for Modeling, Simulating, and Optimizing Energy Markets

Abstract

The objective of this study is to advance the optimization of hybrid electricity markets using multi-agent reinforcement learning (MARL). The transition from centralized systems to public–private models introduces significant challenges, including the emergence of independent market players and the increasing integration of renewable energy sources (RESs). These challenges are further intensified by rapidly shifting demand patterns, driven both by energy-intensive data centers and AI inference workloads, as well as by political and societal instabilities. To address these complexities, we develop a formal model of market participants’ behavior and propose a MARL-based framework for optimizing system operator strategies. This framework incorporates dynamic pricing and dispatch scheduling to minimize operational costs, maintain grid stability, and align market incentives. We also present a new, adaptable simulation environment compatible with state-of-the-art MARL methods. Empirical evaluations in increasingly complex scenarios demonstrate the effectiveness of our approach in capturing the dynamic and decentralized nature of modern electricity markets.