Strategic equilibria in centralized electricity markets

Pedro F. Correia, James D. Weber, Thomas J. Overbye, Ian A. Hiskens

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The introduction of competition in electricity markets has given rise to the problem of strategic bidding by rational market participants (or players) in pursuit of individual profit (or welfare) maximization. Given the simultaneous action of all players, Nash equilibria are the solutions in the bidding space that simultaneously satisfy their individual objectives. The paper addresses the problem of finding Nash equilibria in a centralized competitive electricity market (PoolCo model) in which we assume that the players have reasonable estimates about all the other players' utility functions. In addition, we assume that a central decision maker - the independent grid operator or IGO -dispatches the market using an OPF tool that accepts as its inputs the bids and offers freely submitted by the participants. The paper shows how to search for multiple equilibria in a systematic manner if we make specific assumptions for the grid model and for the utility functions.

Original languageEnglish (US)
Title of host publication2001 IEEE Porto Power Tech Proceedings
Pages246-251
Number of pages6
Volume1
DOIs
StatePublished - Dec 1 2001
Event2001 IEEE Porto Power Tech Conference - Porto, Portugal
Duration: Sep 10 2001Sep 13 2001

Other

Other2001 IEEE Porto Power Tech Conference
Country/TerritoryPortugal
CityPorto
Period9/10/019/13/01

Keywords

  • Complete information
  • Nash equilibria
  • Rational players

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Fuel Technology

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