Power System Optimization Problems: Game Theory Applications (original) (raw)
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Modeling transmission sector of electricity markets is a challenge due to issues like violation of network operating limits, information asymmetry and conflict of incentives. A model that addresses these concerns is a significant solution because it integrates the power business seamlessly when transmission also is competitive. In this paper, a model for transmission zone restructure is proposed. It incorporates market mechanisms to tackle network issues. A differential, elastic Transmission Service Charge (TSC) to reduce line loss and power deficit is also presented. Using this TSC as a common incentive or coalition value, transmission is modeled in a Cooperative Game Theory (CGT) environment. Counter-flow data is generated using graph theory based power vectors and information asymmetry is resolved. The method when applied to a 24 bus Indian power system gave a set of trades addressing above concerns.
An Integrated Model for Transmission Sector using Cooperative Game Theory
2010
Restructured power systems require a separate model to analyze organizational, economic, operational and planning concerns in transmission sector of electricity markets. Grid operation in these markets is affected by violation of network operating limits, conflict of incentives and information asymmetry since commercial considerations overrule engineering needs. This paper proposes a model for transmission restructure that addresses these concerns and integrates the power business seamlessly. It incorporates market mechanisms to tackle network issues. A differential, elastic Transmission Service Charge (TSC) to reduce line loss and power deficit is presented and used as a coalition value to model transmission in a Cooperative Game Theory (CGT) environment. Counter-flow data is generated using graph theory based power vectors to resolve information asymmetry. The method was applied to a 24 bus Indian power system and gave a set of trades addressing above challenges.
International Review of Electrical Engineering-iree, 2013
In deregulated electricity markets there is a strong need for effective allocation of fixed costs to market participants. The conventional usage based methods currently employed in market scenario may fail to send right economic signals. Hence in this paper, cooperative game theory is applied for power system fixed cost allocation. Increasing competition in the energy market can help maximize customers’ payoffs. This can be achieved by applying game theory. In this regard, two solution methodologies such as Nucleolus and Shapley value are adopted in a Multi-lateral market. Both the methods have their pros and cons, while it can be inferred that Shapley value is a more preferable method when the solution is in the core of the game. In this paper, these methods are applied in case of IEEE 14 bus, New England 39 bus and Indian 75 bus power system and the results obtained are compared with the conventional usage based methods
Efficient management of interconnected power systems: A game-theoretic approach
Automatica, 1978
When the power purchasing problem between two utility companies is modelled as a cooperative game, the Nash-Harsanyi solution, characterized for two information structures, yields a closed loop exchange strategy having significant cost reductions. Key Word Index Power management; power system control: game theory: mathematical programming; stochastic control. Summary-The optimal management over a one year planning horizon, of two interconnected hydro-thermal power systems is considered. The optimal production in each system is modelled as a stochastic control problem whose solution is searched in a particular class of control strategies. The efficient exchange of energy between the two systems and its pricing are viewed as a cooperative game and the Nash-Harsanyi bargaining solution is characterized. Various information structures for the exchange and price strategies are discussed and it is shown that, in all cases, the price strategy is equivalent to the definition of a compensatory side payment which equalizes the advantages accruing to each of the two players with respect to a status quo situation where no interconnectien is available. A numerical illustration based on a typical European power system is presented to assess the potential gain when using a closed loop exchange strategy instead of an open loop one.
IET Generation, Transmission & Distribution, 2010
Competition has been introduced in the electricity markets with the goal of reducing prices and improving efficiency. The basic idea which stays behind this option is that, in competitive markets, a greater quantity of the good is exchanged at a lower and stable price, leading to higher market efficiency. Electricity markets are different from other commodities mainly because of the operational characteristics, perishability and lack of large storage capability, which may impact the market performances. The network structure of the system on which the economic transactions need to be undertaken poses strict physical and operational constraints. Those physical and operational constraints need to be ensured to guarantee an operating state feasible and when those constraints binding the congested system show remarkable economic impacts. Strategic interactions among market participants with the objective of maximising their surplus must be taken into account when modelling competitive electricity markets. The network constraints, specific of the electricity markets, provide opportunity of exercising strategic behaviour of the market participants. Game theory provides a tool to model such a context. This study provides a comparative analysis of the application of game theory models to network constrained electricity markets with the focus on the strategic behaviour of the electricity producers. Different models such as supply function equilibrium, Cournot, Stackelberg and conjecture supply function are considered and their appropriateness to model the electricity markets is discussed. Under network constraints with reference to the IEEE 30-and IEEE 57-bus test systems, various models are compared in quantitative way to provide analysis of the market performance under different representation of the oligopoly competition in the electricity markets.
Impact of generators' behaviors on Nash equilibrium considering transmission constraints
European Transactions on Electrical Power, 2009
In imperfect competition, electricity markets with transmission constraints and limited number of producers, generation companies (GenCos) are facing an oligopolistic market rather than perfect competition. In this market each GenCo may increase its own payoff through strategic bidding. This paper investigates the problem of developing optimal bidding strategies of GenCos considering participants' market power as well as transmission constraints. The problem is modeled as a bi-level optimization that at the first level each GenCo maximizes its payoff through strategic bidding, while at the second level, an independent system operator (ISO) dispatches power, solving an optimal power flow (OPF) problem. The objective of proposed optimization model is generating optimal bidding strategies for GenCos, while satisfying transmission constraints. Different aspects of exercising market power are studied and the corresponding effects on Nash equilibrium and GenCos' characteristics are proposed. Finally, the interaction of participants' different bidding strategies is investigated. An IEEE-30 bus test system is used for case study to demonstrate simulation results.
Transmission cost allocation by cooperative games and coalition formation
IEEE Transactions on Power Systems, 2002
The allocation of costs of a transmission system to its users is still a pending problem in many electric sector market regulations. This paper contributes with a new allocation method among the electric market participants. Both cooperation and competition are defined as the leading principles to fair solutions and efficient cost allocation. The method is based mainly on the responsibility of the agents in the physical and economic use of the network, their rational behavior, the formation of coalitions and cooperative game theory resolution mechanisms. The designed method is applicable to existing networks or to their expansion. Simulations are made with sample networks. Results conclude that adequate solutions are possible in a decentralized environment with open access to networks. Comparisons with traditional allocation systems are shown, cooperative game solutions compare better in economic and physical terms.
2007 IEEE Lausanne Power Tech, 2007
We investigate the impact of constraints (generation and transmission) and demand elasticity on Independent Power Producers' (IPPs) market strategies. An analytical model based on classical Cournot model has been developed to investigate the strategies of power producers. The results show that some IPPs are capable of obtaining same profit with different outputs through capacity withholding, which results in the increase of market price. Consumer can reduce its payment by changing its elasticity of demand within certain margins.
Coordination of multilateral trades in electricity markets via power vectors
European Transactions on Electrical Power, 2011
A transmission restructure model is presented, which resolves line abuse, conflict of incentives and information asymmetry in electricity markets. It uses market compatible game theory, graph theory, market mechanism, multilateral trade structure, etc. rather than conventional tools. The model is useful to emulate any active, competitive transmission sector. It has more relevance in countries like India with high T&D loss and power deficit problems. Cooperative game theory (CGT) is holistically applied in organizational, operational, commercial and planning aspects of restructure. A three phase CGT environment to model entity interactions, an elastic transmission service charge (TSC) to penalize abuse and a powerful power vector to resolve information asymmetry are some proposals developed in this context. In the scheme, Discos use power vectors to play the game and negotiate for agreeable TSC share and engineer fruitful mergers. A stable set of coalitions contracting optimal trades at lowest TSC is finally obtained. The method is illustrated on a 5 bus and successfully tested on a 24 bus Indian power system. The outcome is that agents aggregate sequentially, to safeguard network security as a common agenda, despite market activities starting at diverse locations. These results are important because transmission is the most difficult zone to model in electricity markets due to several issues and this model addresses most of them. Copyright