Derivation of a mathematical structure for market-based transmission augmentation in oligopoly electricity markets using multilevel programming

In this paper, we derive and evaluate a new mathematical structure for market-based augmentation of the transmission system. The closed-form mathematical structure can capture both the efficiency benefit and competition benefit of the transmission capacity. The Nash solution concept is employed to m...

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Bibliographic Details
Main Authors: Hesamzadeh, M.R., Biggar, D., Hosseinzadeh, N., Wolfs, P.J.
Format: Conference Proceeding
Language:English
Subjects:
Ad hoc networks
Capacity planning
Characterisation
Closed form
Commerce
Competition
Costs
Electric power transmission
Electric variables measurement
Electricity market
Electricity supply industry
Generation cost
Mathematical programming
Mathematical structure
Multilevel Programming
Nash equilibria
Nash Equilibrium
Nash solutions
Oligopoly
Oligopoly Electricity Market
Potential energy
Potential energy surfaces
Power generation
Power system planning
Process planning
Social cost
Telecommunication networks
Total values
Transmission Augmentation
Transmission capacities
Transmission systems
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Summary:In this paper, we derive and evaluate a new mathematical structure for market-based augmentation of the transmission system. The closed-form mathematical structure can capture both the efficiency benefit and competition benefit of the transmission capacity. The Nash solution concept is employed to model the price-quantity game among GenCos. The multiple Nash equilibria of the game are located through a characterisation of the problem in terms of minima of the R function. The worst Nash equilibrium is used in the mechanism of transmission augmentation. The worst Nash equilibrium is defined as the one which maximises the social cost, total generation cost + total value of lost load. Thorough analysis of a simple three-node network is presented to clearly highlight the mechanism of the derived mathematical structure from different perspectives.
ISSN:1932-5517
DOI:10.1109/PES.2009.5275636