Journal of Electrical Engineering and Technology

The Korean Institute of Electrical Engineers (대한전기학회)
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Solving Mixed Strategy Nash-Cournot Equilibria under Generation and Transmission Constraints in Electricity Market

  • Lee, Kwang-Ho (Department of Electrical Engineering, Dankook University)
  • Received : 2012.08.06
  • Accepted : 2013.02.14
  • Published : 2013.07.01
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Abstract

Generation capacities and transmission line constraints in a competitive electricity market make it troublesome to compute Nash Equilibrium (NE) for analyzing participants' strategic generation quantities. The NE can cause a mixed strategy NE rather than a pure strategy NE resulting in a more complicated computation of NE, especially in a multiplayer game. A two-level hierarchical optimization problem is used to model competition among multiple participants. There are difficulties in using a mathematical programming approach to solve a mixed strategy NE. This paper presents heuristics applied to the mathematical programming method for dealing with the constraints on generation capacities and transmission line flows. A new formulation based on the heuristics is provided with a set of linear and nonlinear equations, and an algorithm is suggested for using the heuristics and the newly-formulated equations.

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