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http://dx.doi.org/10.5370/KIEE.2010.59.7.1226

Effect of Financial Transmission Rights on the Strategic Bidding Behavior of the Electricity Producers  

Lee, Kwang-Ho (단국대 전기공학과)
Shin, Jae-Hong (단국대 전기공학과)
Publication Information
The Transactions of The Korean Institute of Electrical Engineers / v.59, no.7, 2010 , pp. 1226-1231 More about this Journal
Abstract
This paper looks at the influence of Financial Transmission Rights (FTRs) on the market value(Social Welfare; SW) in the competitive electricity market. The transmission line constraints make it difficult to compute the Nash Equilibrium (NE) due to causing a mixed strategy NE instead of a pure strategy NE. Computing a mixed strategy is more complicated in a multi-player game. The aim of this paper are to compute a mixed strategy NE and analyze SW in power transaction with FTRs. This paper introduces a formula and a technique for solving NE of multi-player game with FTRs. In addition, it analyzes the influence of holding of FTRs by generation company on SW and it proposes the SW at NE is influenced by Power Transfer Distribution Factor (PTDF) where holder of FTRs are located. The assertion is verified by calculating the mixed strategy utilizing the Cournot model widely used for studies on FTRs.
Keywords
Financial Transmission Rights; Nash Equilibrium; PTDF; Mixed-Strategy; Social Welfare;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
Times Cited By SCOPUS : 0
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