Equilibrium values in a competitive power exchange market (Q5948631)

An open elecricity market with demand uncertainty is considered in the paper. For modeling the market at the first step it is considered a simplified structure that captures key properties. The authors model the Power eXchange (PX) and real time balancing markets as multi-round non-sealed bid auctions. The generators each decides on a bidding price to maximize the profit. Units are dispatched in order of the bid from lowest to highest until demand is satisfied. The market clearing price is the highest bid among the dispatched units. All dispatched units are then sold at this market clearing price. In the PX market the total demand is known to all bidders and can be modeled as deterministic; however in the balancing market where generators submit their bids before demand is realized, demand is assumed to be stochastic. Equilibrium points are given and under market stability assumptions the authors derive Nash equilibrium solutions. Numerical examples are given at the end of the paper.