Dynamic oligopolistic competition on an electric power network with ramping costs and joint sales constraints

Abstract

Most previous Cournot-Nash models of competition among electricity generators have assumed a static perspective, resulting in finite dimensional variational and quasi-variational inequality formulations. However, these models' system costs and constraints fail to capture the dynamic nature of power networks. In this paper we propose a more general and complete model of Cournot-Nash competition on power networks that accounts for these features by including ($i$) explicit intra-day dynamics that describe the market's evolution from one Generalized Cournot-Nash Equilibrium to another for a 24 hour planning horizon, ($ii$) ramping constraints and costs for changing the power output of generators, and ($ iii $) joint constraints that include variables from other generating companies within the profit maximization problems for individual generators. These joint constraints yield a generalized Nash equilibrium problem which can be represented as a differential quasi-variational inequality (DQVI); such generalized Nash equlibrium problems can have multiple solutions. The resulting formulation poses computational challenges that can cause traditional algorithms for DVIs to fail. A restricted formulation is proposed that can be solved by an implicit fixed point algorithm. A numerical example is provided.