Long-term market equilibrium modeling for generation expansion planning

Centeno, Efraim; Reneses, Javier; Garcia, Rafael; Sanchez, J.J.

doi:10.1109/ptc.2003.1304118

Cited by 20 publications

(11 citation statements)

References 5 publications

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“…This corresponds to the open-loop equilibrium conditions presented in [10], the Cournot-based model presented in [11], which is solved using a mixed complementarity problem (MCP) schema, and the model analyzed in [12], which is solved using an equivalent optimization problem. However, this approach has its drawbacks, as it may overly simplify the dynamic nature of the problem, as expansion and operation decisions are taken simultaneously.…”

Section: Introductionmentioning

confidence: 99%

“…First of all, even though existing open-loop approaches like in [10]- [12] are adequate and useful to approximate the generation capacity problem, they do not model the significant temporal separation between when capacity decisions are taken and when energy is produced with that capacity. We overcome this problem by proposing a bilevel model.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Generation Capacity Expansion in Liberalized Electricity Markets: A Stochastic MPEC Approach

Wogrin

Centeno

Barquı́n

2011

IEEE Trans. Power Syst.

111

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This paper proposes a bilevel model to assist a generation company in making its long-term generation capacity investment decisions considering uncertainty regarding the investments of the other generation companies. The bilevel formulation allows for the uncoupling of investment and generation decisions, as investment decisions of the single investing generation company are taken in the upper level with the objective to maximize expected profits and generation decisions by all companies are considered in the lower level. The lower level represents the oligopolistic market equilibrium via a conjectured-price response formulation, which can capture various degrees of strategic market behavior like perfect competition, the Cournot oligopoly, and intermediate cases.The bilevel model is formulated as an MPEC, replacing the lower level by its KKT conditions and transformed into a MILP. Results from a study case are presented and discussed.Index Terms-Bilevel programming, generation expansion planning, mathematical program with equilibrium constraints (MPEC).

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Generation Capacity Expansion in Liberalized Electricity Markets: A Stochastic MPEC Approach

Wogrin

Centeno

Barquı́n

2011

IEEE Trans. Power Syst.

111

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“…covered only by the newly installed generation capacity Provided that the range of the derived equilibrium capacities is not large and considering the generally increasing trend of demand and the retirement of older units, this underlying assumption of the model can be ignored. The demand value can either refer to the average expected demand (thus being high or low 11 ), or it can correspond to a high and low demand state on the yearly load duration curve. In the latter case the probability ‫‬ would refer to the relative weight of these periods.…”

Section: A Applying the Model To Electricity Marketsmentioning

confidence: 99%

“…could be considered as the contestable demand for new generation units. 11 In order to be exact, the states should be named high and medium, as our model implies that a third low demand state exists, corresponding to all periods where the market is not contestable by the examined technology. would be the case for example when nuclear units operate in the market, usually having contracted the total of their capacity at low 12 Since all pricing stages yield the same equilibrium profits.…”

Section: B Conventions and Parameter Specificationmentioning

confidence: 99%

Modeling electricity markets as two-stage capacity constrained price competition games under uncertainty

Sakellaris¹

2010

2010 7th International Conference on the European Energy Market

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Abstract-The last decade has seen an increasing application of game theoretic tools in the analysis of electricity markets and the strategic behavior of market players. This paper focuses on the model examined by Fabra et al. (2008), where the market is described by a two-stage game with the firms choosing their capacity in the first stage and then competing in prices in the second stage. By allowing the firms to endogenously determine their capacity, through the capacity investment stage of the game, they can greatly affect competition in the subsequent pricing stage. Extending this model to the demand uncertainty case gives a very good candidate for modeling the strategic aspect of the investment decisions in an electricity market. After investigating the required assumptions for applying the model in electricity markets, we present some numerical examples of the model on the resulting equilibrium capacities, prices and profits of the firms. We then proceed with two results on the minimum value of price caps and the minimum required revenue from capacity mechanisms in order to induce adequate investments.

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“…Usando variable discreta, en [15] se aplica la solución al problema dinámico de complementariedad para reducir el espacio factible de la variable discreta de expansión de un juego matricial de Cournot entre dos empresas. Análogamente, en [16] se usan proyecciones de precios para el mismo fin.…”

Section: Introduccionunclassified

Oligopolistic Generation Expansion:A Multi-leader Multi-follower approach

Avila

Behnke

2013

IEEE Latin Am. Trans.

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In this paper it is proposed a novel analysis of competitive generation expansion under imperfections such as indivisibility of projects, risk aversion and oligopolies investing strategically. Based on the game theory, the oligopoly is modeled as a group of leaders companies, with the first option to invest, facing potential new investors to enter the market. The approach can be seen as an extension of the Stackelberg game to a multileader case. A solution procedure is developed which combines equilibrium search algorithms for non-strategic and Nash in matrix games. An application example to a representation of the Chilean power system shows the viability of the methodology. The simulations suggest that the market power of the oligopoly depends on its ability to control the most profitable expansion technologies and the possibility that new investors decide to enter into the market. This kind of results can assist the analysis of imperfect-competitive generation expansion in real systems.

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Long-term market equilibrium modeling for generation expansion planning

Cited by 20 publications

References 5 publications

Generation Capacity Expansion in Liberalized Electricity Markets: A Stochastic MPEC Approach

Generation Capacity Expansion in Liberalized Electricity Markets: A Stochastic MPEC Approach

Modeling electricity markets as two-stage capacity constrained price competition games under uncertainty

Oligopolistic Generation Expansion:A Multi-leader Multi-follower approach

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