Market power in a power market with transmission constraints

摘要

In this paper we present a model for analysing thestrategic behaviour of a generator and its short run implicationson an electricity network with transmission constraints. Theproblem is formulated as a Stackelberg leader-follower game. Theupper level problem is generator’s profit maximisation subject tothe solution of the lower level problem of optimal power flow(OPF) solved by system operator. Strategic bidding is modelled asan iterative procedure where the supply functions of the competitivefringe are fixed while the strategic player’s bids are changedin a successive order until the bid giving maximum profit isfound. This application rests on the assumption of supply functionNash equilibrium when the supplier believes that changes in hisbids will not influence other actors to alter their bid functions.Numerical examples are presented on a simple triangular network.