  Control reserves are power generation or consumption entities that ensure
balance of supply and demand of electricity in real-time. In many countries,
they are operated through a market mechanism in which entities provide bids.
The system operator determines the accepted bids based on an optimization
algorithm. We develop the Vickrey-Clarke-Groves (VCG) mechanism for these
electricity markets. We show that all advantages of the VCG mechanism including
incentive compatibility of the equilibria and efficiency of the outcome can be
guaranteed in these markets. Furthermore, we derive conditions to ensure
collusion and shill bidding are not profitable. Our results are verified with
numerical examples.
