dynamics driven by the decision-making power producers"
Ernst, Anna Minoia, and Marija Ilic
In this paper we consider a tool for analyzing the market outcomes when a set
of competitive agents (power producers) interact through the market place. The
market clearing mechanism is based on the location marginal price scheme. A
model of the strategic behavior is formulated for the agents. Each one chooses
its bid in order to maximize its profit by assuming that the other agents will
post the same bid as at the previous clearing of the market, and by knowing
the network characteristics. The income of each agent over a certain temporal
horizon for different power system configurations (the addition of new
transmission capabilities, new power plants) is evaluated by assuming a market
dynamics and by integrating this dynamics over the chosen temporal horizon.
The mathematical formulation, for the sake of simplicity, is related to a two
node power system. In the simulations, the influence of different conditions
(line transfer capacity, the number and size of generators, the presence of
portfolio) on market outcomes is analyzed, and interesting and sometimes
counter-intuitive results are found.
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