Electricity spot market with transmission losses

Abstract

In order to study deregulated electricity spot markets, various models havebeen proposed. Most of them correspond to a, so-called, multi-leader-follower gamein which an Independent System Operator (ISO) plays a central role.Our aim in this paper is to consider quadratic bid functions together with thetransmission losses in the multi-leader-follower game. Under some reasonable assumptions we deducequalitative properties for the ISO's problem. In the two islands type market, the explicitformulae for the optimal solutions of the ISO's problem are obtained and we show theexistence of an equilibrium.