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This study modified the model from Aalami, Moghaddam and Yousefi (2010, pp. 245-246) by incorporating loss aversion and penalty to study the effectiveness of Capacity Bidding Program in Thailand. The modified models were used to simulate different scenarios of Capacity Bidding Program with peak load data from Provincial Electricity Authority in 2017. Economic results and strategy success indices were compared between ten simulated scenarios. We found that the Capacity Bidding Program with 3 baht/kWh incentive, 2 baht/kWh penalty, and loss aversion index equal two gave the highest value in strategy success index. In addition, the strategy success index varied with self and cross elasticities. If the self and cross elasticities decrease, the strategy success index also decreases. These results are consistent with Aalami, Moghaddam and Yousefi (2010, p. 249). Moreover, we found that the reduction of peak load depends on the level of loss aversion. If the loss aversion increases, the peak load reduction also increases. These results are different from those in Mohajeryami, Schwarz and Baboli (2015, p. 5) because the program which Mohajeryami, Schwarz and Baboli (2015, p. 2) used did not have penalty.
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