Guillermo Bautista

Formulation of Oligopolistic Competition in AC Power Networks: An NLP Approach

Summary form only given: In this paper, oligopolistic competition in a centralized power market is characterized by a multi-leader single-follower game, and formulated as a nonlinear programming (NLP) problem. An ac network is used to represent the transmission system and is modeled using rectangular coordinates. The follower is composed of a set of competitive suppliers, demands, and the system operator, while the leaders are the dominant suppliers. The ac approach allows one to capture the strategic behavior of suppliers regarding not only active but also reactive power. In addition, the impact of voltage and apparent power flow constraints can be analyzed. Different case studies are presented using a three-node system to highlight the features of the formulation. Results on a 14-node system are also presented.

Screening and mitigation of exacerbated market power due to financial transmission rights

A methodology is proposed for taking into account potential exacerbation of market power due to financial transmission rights (FTR) allocations. Hedging position ratios (HPRs) are computed for FTR bids. These ratios quantify the relationship between the positions of an FTR bidder in the energy market and in the transmission rights allocation (based on the transmission rights bids). These ratios are used to identify the potential gambling positions from the transmission rights bidders and, therefore, used to prioritize critical positions in the auction. The transmission-right auction is modeled as a quadratic programming problem with a direct current (DC) approximation. The methodology is illustrated by a three-node network and then extended to larger networks.

Numerical Study of Affine Supply Function Equilibrium in AC Network-Constrained Markets

An affine supply function equilibrium (SFE) approach is used to discuss voltage constraints and reactive power issues in the modeling of strategic behavior. Generation companies (GenCos) can choose their bid parameters with no restrictions for both energy and spinning reserves. The strategic behavior of generators is formulated as a multi-leader single-follower game. Each GenCo is modeled as a leader, while the central market operator running a cost minimization process is the sole follower. An ac model is considered to represent the transmission system. A three-node system is used to illustrate several cases, and study the implications of the incentives of the strategic players to exploit active and reactive power, and spinning reserves in order to maximize profits. Results for a 14-node system are also presented.

Beyond the Use of Linear Approximations for Modelling Nash-Cournot Equilibria

A comparison of Nash-Cournot equilibria using DC and AC approximations of the transmission system is presented in this paper. The goal of doing this comparison is to identify the impact of reactive power and voltage-related issues on Nash equilibria. Following the same rationality of competition and the same solution scheme, a considerable mismatch in outcomes is found. This shows that the use of common linear approximations of the transmission system to model strategic behaviour in electricity markets may produce outcomes that are unlikely to be observed in real markets. Three- and 14-node systems are used to analyze different study cases.

An oligopolistic model for power networks: beyond the incentive of the energy market

In this paper, a model for oligopolistic competition is presented. The incidence of financial transmission rights (FTRs) ownership on strategic behaviour is analyzed in a dynamic model for energy and spinning reserve. Most of previous models have been static and they focus only in the energy market incentives for strategic behaviour. In contrast, in this paper, intertemporal constraints, the spinning reserve (SR) market and the FTRs ownership together with conjectured functions for supply and transmission are introduced. Under such considerations, the competition among participants is modelled with more realism. The resulting equilibrium problem is modelled as a linear complementarity problem (LCP). The analysis is illustrated by a six-node network with a DC approximation.

Mitigating market power in financial transmission-right allocations

A methodology is proposed for taking into account potential market power in financial transmission-right (FTR) allocations. Hedging position ratios (HPRs) are computed for every FTR bid. These ratios quantify the relationship between the positions of a FTR bidder in the energy market, and in the transmission rights allocation (based on the transmission rights bids). These ratios are used to identify the potential market power from the transmission rights bidders and, therefore, used to prioritize critical positions in the auction. The transmission-right auction is modelled as a quadratic programming problem and solved by a primal-dual interior-point method. The methodology is illustrated by a three-node network, and then generalized in a five-node network.

Linear complementarity models for transmission markets

In this paper, an equilibrium framework for markets for financial transmission rights is presented. The proposed framework considers the multi-agent nature of a transmission-right market where all participants are trying to maximize their goals simultaneously. This multi-agent problem is defined in terms of market-equilibrium conditions for every entity that participates in the transmission market. The set of equilibrium conditions is then defined as a complementarity problem. Under this framework, FTRs obligation are modelled for one-period, multi-period and multi-round markets. The models are illustrated by a three-node system and then extended to a thirty-node system using a DC-network approximation.

Analysis of Market Power Using an AC Transmission System

Using an AC transmission network, oligopolistic competition in power markets is formulated as a nonlinear programming (NLP) problem, and characterized by a multi-leader single-follower game. The follower is composed of a set of competitive suppliers, demands and the system operator, while the leaders are the dominant suppliers. An AC network is modelled using rectangular coordinates. This approach allows one to capture the strategic behavior of suppliers regarding not only active but also reactive power. With this setting, the voltage and apparent power flow constraints can be easily explored. Based on a three-node system, an illustrative study case is used to highlight the features of the formulation

An oligopolistic model of an integrated market for energy and spinning reserve

Summary form only given. In this paper, a model for oligopolistic competition in electricity markets is presented. Most previous proposed models have been static and focused only on the energy market incentives for strategic behaviour. In contrast, in this paper, a multi-period market for energy and spinning reserve (SR) is considered. By including such factors, the competition among participants is modelled with more realism. Competition in the energy market is modelled by means of conjectured supply functions, while conjectured reserve-price response functions are used to consider the generators ability to alter the SR prices. The resulting equilibrium problem is modelled in terms of complementarity conditions. Based upon a complementarity model, the opportunity cost between the energy and SR markets is derived for oligopolistic markets. The proposed model is illustrated by a six-node network using a DC approximation.