optimal bidding scheduling and deployment of battery systems in california day ahead energy market an optimal supply and demand bidding scheduling and deployment design framework is proposed for battery systems it takes into account various design factors such as the day ahead and real time market prices and their statistical dependency as well as the location size efficiency lifetime and charge and discharge rates of the batteries utilizing second life used batteries is also considered without loss of generality our focus is on the california independent system operator iso energy market and its two available bidding options namely self schedule bidding and economic bidding while the formulated stochastic optimization problems are originally nonlinear and difficult to solve we propose a methodology to decompose them into inner and outer subproblems accordingly we find the global optimal solutions within a short amount of computational time all case studies in this paper are based on real market data

causes for changing performance of the business groups in a transition economy market level versus firm level factors in china this article investigates longitudinal changes in the relative performance of business groups utilizing data on listed companies in china over a 10 year period 1994 2003 using a measure of firm value in the stock market and panel regression methods this article finds the initially superior and eventually worsening performance of group affiliated firms compared with stand alone firms to explain the downward performance this article considers several alternative hypotheses namely institutional development increasing competition diversification discount agency costs from state ownership and agents asset diversion behavior this article has found certain differences in the explanatory power of each hypothesis while the institutional development hypothesis is somewhat weak the increasing discount for unrelated diversification as well as serious agency costs revealed in asset diversion in the business groups can better explain the longitudinal decrease in the performance of business groups we find that while diversification still creates values its marginal contribution has decreased over time and that while the state ownership variable negatively affects the values of firms in general it is not the cause of the worsening valuation of business groups copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

a new transmission tariff allocation model based on bilevel programming this paper proposes a flow based approach for the transmission tariff allocation problem based on the notions of long run marginal cost lrmc and nodal exchange factors nefs a worst case power flow expressed in terms of nefs is formulated to characterize the system state additionally the nefs optimal values are determined considering a specific criterion to compute tariffs the resulting problem is formulated as a bilevel program the upper level is a worst case power flow that maximizes line flows taking into account the transmission tariffs computed in the lower level the criterion considered in the lower level aims to minimize the variation range of transmission tariffs which is particularly desirable to provide incentives for renewable sources installed far away from load centers the resulting bilevel problem may have multiple solutions here the uniqueness in tariffs is preserved by solving an alternative problem once both the generation dispatch and the variation range of transmission tariffs are known numerical results are provided for a 6 bus system and the ieee 118 bus system

transmission system management and pricing new paradigms and international comparisons the transmission system once the necessary but nearly invisible component of the electric power system is now the focus of physical electrical and financial attention of the utility and more significantly their potential suppliers customers this paper has three primary objectives the first is to present a discussion of a new paradigm for the electric power industry the second is to review transmission pricing options specifically those utilizing either long run lrmc or short run srmc marginal cost based approaches the third is to provide a review of innovative approaches to transmission asset management and finance as seen from international experience

us mexico fresh vegetable trade the effects of trade liberalization and economic growth abstract studies of us mexico vegetable trade have generally emphasized the importance of us tariffs in determining the competitive advantage of us producers even so research has identified at least four factors related primarily to the different levels of economic development in the us and mexico that also have important effects on us mexico agricultural trade in general and fresh vegetable trade in particular these include the differential growth rates of us and mexican real wages production technology yields and per capita income as well as cyclical movements in the real mexican peso us dollar exchange rate this study examines the relative contribution of nafta and the development related factors to likely future changes in us fresh vegetable imports from mexico the analysis employs an econometric simulation model of us and mexican markets for five fresh vegetables tomatoes cucumbers squash bell peppers and onions accounting for 80 of us fresh vegetable imports the results suggest that the 1994 1995 peso devaluation rather than nafta was primarily responsible for the sharp increase in us imports of mexican vegetables observed in the first years following the implementation of nafta over time however the results suggest that differences in the growth rates of us and mexican production yields and to a lesser extent of us and mexican real incomes and or real wage rates could plausibly contribute more to the future growth of us tomato squash and onion imports from mexico than the trade liberalizing effects of nafta

market clearing with stochastic security part i formulation the first of this two paper series formulates a stochastic security constrained multi period electricity market clearing problem with unit commitment the stochastic security criterion accounts for a pre selected set of random generator and line outages with known historical failure rates and involuntary load shedding as optimization variables unlike the classical deterministic reserve constrained unit commitment here the reserve services are determined by economically penalizing the operation of the market by the expected load not served the proposed formulation is a stochastic programming problem that optimizes concurrently with the pre contingency social welfare the expected operating costs associated with the deployment of the reserves following the contingencies this stochastic programming formulation is solved in the second companion paper using mixed integer linear programming methods two cases are presented a small transmission constrained three bus network scheduled over a horizon of four hours and the ieee reliability test system scheduled over 24 h the impact on the resulting generation and reserve schedules of transmission constraints and generation ramp limits of demand side reserve of the value of load not served and of the constitution of the pre selected set of contingencies are assessed

pricing of fluctuations in electricity markets abstract in an electric power system demand fluctuations may result in significant ancillary cost to suppliers furthermore in the near future deep penetration of volatile renewable electricity generation is expected to exacerbate the variability of demand on conventional thermal generating units we address this issue by explicitly modeling the ancillary cost associated with demand variability we argue that a time varying price equal to the suppliers instantaneous marginal cost may not achieve social optimality and that consumer demand fluctuations should be properly priced we propose a dynamic pricing mechanism that explicitly encourages consumers to adapt their consumption so as to offset the variability of demand on conventional units through a dynamic game theoretic formulation we show that under suitable convexity assumptions the proposed pricing mechanism achieves social optimality asymptotically as the number of consumers increases to infinity numerical results demonstrate that compared with marginal cost pricing the proposed mechanism creates a stronger incentive for consumers to shift their peak load and therefore has the potential to reduce the need for long term investment in peaking plants

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part ii case studies this paper presents the numerical analysis of the bilevel programming approach for revenue and network constrained market clearing developed in its companion paper the impact of minimum revenue conditions and minimum declared profits on generation and consumption levels as well as on locational marginal prices for energy is examined in detail through three case studies first the results from an illustrative example including minimum revenue conditions are comprehensively analyzed the second case study is based on the ieee reliability test system and considers minimum declared profits in the third case study a modified version of the ieee 118 bus system is tested while accounting for minimum revenue conditions in addition the computational behavior of the proposed approach is illustrated with several case studies including the ieee 300 bus system numerical results show the effectiveness of the proposed approach to handle revenue constraints as well as its superiority over the heuristic currently implemented in the iberian electricity market moreover simulations reveal that unlike previous works in the literature generation revenue constraints can be precisely incorporated in day ahead market clearing while explicitly considering the standard economic dispatch based marginal pricing scheme and without requiring price uplifts

a three level static milp model for generation and transmission expansion planning we present a three level equilibrium model for the expansion of an electric network the lower level model represents the equilibrium of a pool based market the intermediate level represents the nash equilibrium in generation capacity expansion taking into account the outcomes on the spot market and the upper level model represents the anticipation of transmission expansion planning to the investment in generation capacity and the pool based market equilibrium the demand has been considered as exogenous and locational marginal prices are obtained as endogenous variables of the model the three level model is formulated as a mixed integer linear programming milp problem the model is applied to a realistic power system in chile to illustrate the methodology and proper conclusions are reached

strategic bidding of a hydropower producer under uncertainty modified benders approach this paper proposes a stochastic bilevel program for strategic bidding of a hydropower producer the price quantity and ramp rate bids are considered the uncertainty of wind power generation variation of inflows for the hydropower producer and demand variability are modeled through the moment matching scenario generation technique using discretization the stochastic bilevel program is reformulated as a stochastic mixed integer linear program milp with disjunctive constraints we propose a modified benders decomposition algorithm mbda which fully exploits the disjunctive structure of reformatted milp model more importantly the mbda does not require optimal tuning of disjunctive parameters and it can be efficiently parallelized through an illustrative 5 node example we identify possible strategies specific to a hydropower producer for maximizing profit which in turn leads to market insights we also use the ieee 24 node 118 node and 300 node case studies to show how our parallelized mbda outperforms the standard benders decomposition algorithm the parallelized mbda is also compared to the state of the art cplex solver

market based transmission expansion planning restructuring and deregulation has exposed transmission planner to new objectives and uncertainties therefore new criteria and approaches are needed for transmission planning in deregulated environments a new market based approach for transmission planning in deregulated environments is presented in this paper the main contribution of this research is i introducing a new probabilistic tool named probabilistic locational marginal prices for computing the probability density functions of nodal prices ii defining new market based criteria for transmission expansion planning in deregulated environments and iii presenting a new approach for transmission expansion planning in deregulated environments using the above tool and criteria the advantages of this approach are i it encourages and facilitates competition among all participants ii it provides nondiscriminatory access to cheap generation for all consumers iii it considers all random and nonrandom power system uncertainties and selects the final plan after risk assessment of all solutions and iv it is value based and considers investment cost operation cost congestion cost load curtailment cost and cost caused by system unreliability the presented approach is applied to ieee 30 bus test system

evaluation of three methods proposed for the computation of inter tso payments in the internal electricity market of the european union parties to the internal electricity market of the european union iem decided in 2001 to abolish the method of pancaking of transmission tariffs for cross border transactions that was originally in place instead they have agreed to implement a system whereby national transmission tariffs provide access to the entire iem this system is supplemented by a scheme of inter tso payments however conflict may arise if the compensation that a country must pay another one is not in accordance with the electrical usage that the former is making of the grid of the latter for instance inter tso compensation methods itc methods implicitly allocate the cost of any existing or new transmission line therefore the adoption of an inefficient method may be an obstacle for building some needed regional grid investments consequently one should give careful consideration to the selection of the itc method this paper analyzes both qualitatively and quantitatively the implementation of the most relevant itc methods that have been considered so far in the european debate when assessing each method from a conceptual point of view considerable attention is devoted to the critical examination of its main underlying assumptions

network planning in unbundled power systems in this paper a new approach for network planning in unbundled power systems is presented the approach takes into account the desires of demand customers power producers system operator network owner s and regulator in network planning competition reliability flexibility of operation transmission expansion cost and environmental impacts are used as planning criteria in order to consider the importance degrees of stakeholders and planning criteria in network planning first importance degrees of stakeholders and planning criteria are determined by a presented new method then importance degrees of stakeholders and planning criteria are aggregated with appropriateness degrees of expansion plans to compute a fuzzy index for measuring the goodness of expansion plans the final plan is selected using the presented fuzzy risk assessment method the approach is applied to an eight bus test system

revenue adequate bidding strategies in competitive electricity markets energy trading in a competitive electricity market can be modeled as a two level optimization at the top level a centralized economic dispatch ced uses a priority list method to solve the fundamental problem of reliable market clearing with price discovery the lower level consists of a set of decentralized bidding db subproblems the db model uses a self unit scheduling simulator based on parametric dynamic programming to produce hourly bid curves for the central dispatch coordinator unit operating constraints and costs such as the unit minimum up and minimum down times ramp rates and the unit start up no load and sunk capital costs are internalized in the bid curves through the simulator a special algorithm is presented to solve the revenue adequacy problem for marginal units both ced and db models are based on the revenue maximization in contrast with the cost minimization criteria used in the conventional unit commitment uc the proposed method has been tested in a study case and some interesting results have been demonstrated

transmission capacity expansion in imperfectly competitive power markets this paper proposes a mathematical model for transmission planning in an environment where there is imperfect competition in electricity supply industry the model is developed based on the concept of the leader followers game in applied mathematics the leader of the game is the transmission planner and the followers are the strategic electricity producing firms the reaction of the strategic electricity producing firms to the transmission planning decision is modeled using the introduced concept of the worst cournot nash equilibrium the worst cournot nash equilibrium can handle the multiple nash equilibria problem the whole mathematical formulation is a bilevel mixed integer linear programming problem this formulation is achieved using the karush kuhn tucker optimality conditions and a binary mapping approach the application of the proposed approach to the three node example system and the modified six node garver s example system are studied the transmission planning with perfect competition is formulated and used as the benchmark the numerical results show that the proposed approach in this paper can efficiently allocate the additional transmission capacity to the transmission grid such that it reduces the market power cost in the electricity supply industry however further studies should be carried out to scale up the proposed approach to the larger case studies

optimal bidding strategy of a plug in electric vehicle aggregator in day ahead electricity markets under uncertainty with a large scale introduction of plug in electric vehicles pevs a new entity the pev fleet aggregator is expected to be responsible for managing the charging of and for purchasing electricity for the vehicles we approach the problem of an aggregator bidding into the day ahead electricity market with the objective of minimizing charging costs while satisfying the pevs flexible demand the aggregator places demand bids only no vehicle to grid is considered the aggregator is assumed to potentially influence market prices in contrast to what is commonly found in the literature specifically the bidding strategy of the aggregator is formulated as a bilevel problem which is implemented as a mixed integer linear program the upper level problem represents the charging cost minimization of the aggregator whereas the lower level problem represents the market clearing since the bids of other market participants are not known to the aggregator ex ante a simple strategy is used to estimate them based on historical data an aggregated representation of the pev end use requirements as a virtual battery with time varying power and energy constraints is proposed derived from individual driving patterns since driving patterns cannot be perfectly forecasted we introduce a probabilistic virtual battery model we compare the results of the proposed bidding strategy with those of a bidding strategy assuming exogenous prices uncontrolled charging and a central dispatch of the fleet we also explore the impacts of different sources of uncertainty results show that with the proposed bidding strategy costs are significantly lower than under inflexible charging and are lower than assuming exogenous prices moreover the approach also performs well under uncertainty results also suggest that the aggregator only has limited market power potential at moderate pev penetrations

economic transmission augmentation with explicit modeling of the competition benefit this paper derives and evaluates a mathematical structure for identifying economically efficient transmission augmentations the mathematical structure is based on the concepts of sequential move and simultaneous move games in applied mathematics the nash equilibrium solution concept has been reformulated as an optimization problem in the proposed structure the problem of multiple nash equilibria is managed by introducing the concept of the worst case nash equilibrium both the economic concepts of the efficiency benefit and competition benefit of the transmission capacity are explicitly modeled in the proposed structure a simple three bus example system and garver s example system are employed and modified to suit the purpose of analysis a thorough economic study of these example systems is presented to highlight the concept and operation of the proposed mathematical structure from different perspectives the results demonstrate the utility of the proposed structure for measuring the total economic efficiency benefit of additional transmission capacity

an optimization model for the electricity market clearing problem with uniform purchase price and zonal selling prices electricity markets can be designed in different ways one rule that is sometimes enforced is the uniform purchase price under this pricing method all the consumers pay the same price regardless of the zone they belong to by contrast each producer receives its zonal price this asymmetry in the price paid and received makes the clearing process not easily treatable through standard optimization techniques within the framework of marginal pricing this paper shows how it is possible to formulate the market clearing problem with uniform purchase price and zonal selling prices as a computationally tractable mixed integer linear programming problem the proposed approach is tested using real data from the italian day ahead market which is actually based on the aforementioned rule

impact of forecast errors on expansion planning of power systems with a renewables target abstract this paper analyzes the impact of production forecast errors on the expansion planning of a power system and investigates the influence of market design to facilitate the integration of renewable generation for this purpose we propose a programming modeling framework to determine the generation and transmission expansion plan that minimizes system wide investment and operating costs while ensuring a given share of renewable generation in the electricity supply unlike existing ones this framework includes both a day ahead and a balancing market so as to capture the impact of both production forecasts and the associated prediction errors within this framework we consider two paradigmatic market designs that essentially differ in whether the day ahead generation schedule and the subsequent balancing re dispatch are co optimized or not the main features and results of the model set ups are discussed using an illustrative four node example and a more realistic 24 node case study

offering strategies and simulation of multi item iterative auctions of energy contracts the objective of this work is threefold we firstly present an optimization model for a price taker hydrothermal generation company genco to devise bidding strategies in multi item iterative auctions of long term contracts the bidding model calculates a bidder s best response function which takes into account the key issues on the auctioned contracts such as its time horizon the risk factors that affect the future contract outcomes interdependence between auctioned products and the agents risk profile the risk profile of the gencos are represented as piecewise linear utility functions and a practical specification approach is proposed we finally present a simulator of a uniform pricing and iterative multi item contract auction where the set of auction rules is implemented and the optimization model developed is used to determine the gencos s best responses at each auction round the simulator enables auctioneers and generators to estimate the auction s competitive equilibrium price and to study the auction dynamics a real multiproduct descending clock auction is simulated for the brazilian power system under the proposed bidding scheme

computation of extremal nash equilibria in a wholesale power market using a single stage milp this letter proposes a new approach to the computation of extremal nash equilibria in a wholesale power market with transmission constraints the approach uses linearization techniques to formulate the extremal nash equilibrium problem as a single stage mixed integer linear programming problem which can be solved with standard software through the introduced concept of extremal nash equilibria the derived structure can efficiently locate all nash equilibria of the game we show that this approach offers significant performance improvements over existing approaches to computing nash equilibria

risk constrained generation asset arbitrage in power systems a competitive generating company genco can maximize its payoff by optimizing its generation assets this paper considers the genco s arbitrage problem using stochastic price based unit commitment while considering the associated risks the genco may consider arbitrage opportunities in purchases from qualifying facilities qfs as well as simultaneous trades with spot markets for energy ancillary services fuel and emission allowance the tradeoff between maximizing expected payoffs and minimizing risks due to market price uncertainties is modeled explicitly by including the expected downside risk as a constraint the downside risk is defined as the unfulfilled profit the monte carlo simulation is applied to generate scenarios and scenario reduction techniques are applied to reduce the number of scenarios while maintaining a good approximation of the exact solution the proposed case studies illustrate the significance of arbitrage in multi commodity markets and the importance of considering the uncertainty of market prices

modified benders decomposition for solving transmission investment game with risk measure this paper proposes a mathematical model for transmission investment game where there are several transmission planners tps the model is developed assuming a simultaneous move game between tps each tp maximizes the total surplus producers consumers and transmission surplus minus the investment cost of its region given the investment decisions of rival tps the transmission investment risk is also considered using the probability of shortfall measure we assume one market operator who dispatches the generators in all tp s regions the risk constrained nash equilibria model is formulated as a mixed integer linear program milp to solve the proposed milp a solution algorithm is proposed that combines the standard branch and bound algorithm bb with a proposed modified benders decomposition algorithm mbd the proposed bb mbd algorithm is also parallelized to improve the computation performance to improve the coordination between tps a supporting budget mechanism is also mathematically modeled in the milp the numerical results are carried out using the 9 bus 3 area and the ieee three area rts 96 networks the computational performance of proposed bb mbd is compared with standard bb algorithm

sequential coordination of transmission expansion planning with strategic generation investments this paper proposes mathematical models for sequential coordination of transmission expansion planning with strategic generation investments the proactive and reactive coordinations are modeled and studied the interaction between transmission company transco and strategic generation companies gencos is modeled using the sequential move game this is while the interaction between the strategic gencos is modeled as a simultaneous move game in the proactive coordination the transco expands its future transmission capacities taking into account the strategic investments by gencos in the reactive coordination strategic gencos move first and expand their future generation capacities and then transco expands the transmission capacity the proactive coordination is modeled as a mixed integer bilevel linear program miblp and the reactive coordination is modeled as a mixed integer linear program milp the miblp has binary variables in both upper and lower levels the moore bard algorithm is parallelized and used to solve the miblp the mathematical models and the parallelized moore bard algorithm are tested on 3 bus and 6 bus example systems and the modified ieee rts96 also the ieee 118 bus test system is studied using a heuristic version of the moore bard algorithm

congestion driven transmission expansion in competitive power markets a framework for transmission planning in a deregulated power market environment is discussed the level of congestion in the network is utilized as the driving signal for the need of network expansion a compromise between the congestion cost and the investment cost is used to determine the optimal expansion scheme the long term network expansion problem is formed as the decoupled combination of 1 the master problem minimization of investment costs subject to investment constraints and the benders cuts generated by the operational problem power pool and 2 the operational problem whose solution provides congestion details and associated multipliers a proper power pool model is developed and solved for congestion cost congestion revenue and transmission shadow prices linear programming is utilized to solve the investment subproblem while the quadratic programming technique has been used to solve the operational problem the algorithm has been developed for the complete planning process which provides the expansion schemes for the planning horizon the technique has been applied to illustrate the network planning study for a modified ieee 24 bus test system

nash equilibrium in strategic bidding a binary expansion approach this paper presents a mixed integer linear programming solution approach for the equilibrium problem with equilibrium constraints epec problem of finding the nash equilibrium ne in strategic bidding in short term electricity markets a binary expansion be scheme is used to transform the nonlinear nonconvex ne problem into a mixed integer linear problem milp which can be solved by commercially available computational systems the be scheme can be applicable to cournot bertrand or joint price quantity bidding models the approach is illustrated in case studies with configurations derived from the 95 gw brazilian system including unit commitment decisions to the price maker agents

business groups in a market economy abstract the purpose of this paper is to examine the nature and significance of the interfirm relationship called the business group first the nature of the japanese business group is discussed it is then pointed out that the business group is not a phenomenon unique to japan and an effort is made to explain the significance of the business group in the context of a market economy using the williamsonian approach to questions of internal organization and the market finally the relationship between the input output relationship of the firms and their group affiliation is tested

agricultural export dumping the case of mexican winter vegetables in the u s market this paper examines the 1978 agricultural dumping charge brought by florida winter vegetable producers against mexican growers it discusses fair value in the context of three antidumping criteria prices at home and abroad selling below cost of production and third market test the u s department of commerce found in favor of the mexican producers by using the third market test a test which leads to ambiguous results it is the authors contention that the law should be changed so that future cases can be decided on a normal business practice concept accounting for production and costing decisions unique to highly perishable products

the producer welfare effects of trade liberalization when goods are perishable and habit forming the case of asparagus asparagus is a perishable highly seasonal crop we find that out of season imports of asparagus caused habit formation that increased demand in the u s growing seasons we find that habit effects offset about 64 of the welfare losses to u s asparagus producers from increased mexican imports under nafta and all of the u s producer welfare losses from increased peruvian imports under the andean trade preference act we estimate that the u s producer welfare losses from nafta are less than the annualized value of market loss assistance provided them in the 2008 farm bill jel classifications d12 f130 q17 q18

coase revisited business groups in the modern economy ronald coase s celebrated query as to why economic actors typically aggregate into entities called firms rather than transacting as individuals in a market has engendered a vigorous stream of research this paper asks a parallel question why is it that in all modern economies firms themselves aggregate into larger entities often more stable than any literature predicts which are here referred to as business groups after establishing some working definitions and discussing the curious conjunction of empirical importance and analytical invisibility of business groups an attempt is made to establish the most significant dimensions along which such groups vary we end with some speculations on the role of these groups in economic development copyright 1995 by oxford university press

capacity expansion equilibria in liberalized electricity markets an epec approach this paper presents a novel way to model the generation capacity expansion problem in a liberalized framework via a multi year bilevel equilibrium model in the upper level the competing generation companies maximize their individual profits while the lower level represents the market using a conjectured price response approach which allows us to vary the strategic spot market behavior to see how much the reigning competitive behavior impacts investment decisions the bilevel equilibrium model is formulated as an equilibrium problem with equilibrium constraints transformed into a mixed integer linear program and solved as such using diagonalization in order to verify equilibria we present a case study to apply this new modeling approach and to demonstrate that the proposed equilibrium problem with equilibrium constraints can have multiple solutions whose respective investments can vary

foreword for the special section on wind and solar energy uncovering and accommodating their impacts on electricity markets the articles in this special section focus on wind and solar energy and the impact these energy technologies and services will have the utility markets the aim is to give particular focus on some of the areas of investigation that may allow to 1 uncover the impact of renewables on electricity market e g on market clearing outcomes need for ancillary services and investment and to 2 propose methodological innovations being theoretically sound and of practical relevance in order to accommodate substantial shares of renewables in power systems electricity network and markets were designed based on a long history of dealing with various forms of dispatchable generation as well as a fairly predictable inelastic electricity consumption pattern in a centralized top down manner little uncertainty was involved on both generation and demand sides hence allowing for a design of electricity markets accounting for the necessity of a forward optimal allocation with a real time mechanism supporting actual power system operation

changing performance of business groups over two decades technological capabilities and investment inefficiency in korean chaebols abstract this article differentiates itself from the large volume of existing literature on business groups such as korean chaebols in several aspects first it uses productive efficiency rather than financial efficiency as a performance measure second it defines chaebols in three alternative ways and checks whether the results are robust third and most important it explains the sources of the post crisis change in the performance of korean chaebols in terms of technological capabilities and investment inefficiency this study finds that chaebols have become more efficient than non chaebols in the post crisis period compared with the pre crisis period that inefficiency in investment has always been critical in determining productive inefficiency and that after the 1997 financial crisis korean chaebols have improved their performance by reducing investment inefficiencies and enhancing technological capabilities the results of this study are consistent with the often acknowledged advantages of bus

generation flexibility in ramp rates strategic behavior and lessons for electricity market design abstract a ramp rate usually defines the speed at which an electric power producer can decrease or increase its production in limited time the availability of fast ramping generators significantly affects the economic dispatch especially in the systems with high penetration of intermittent energy sources e g wind power since the fluctuations in supply are common and sometimes unpredictable one of the regulatory practices of how to impel generators to provide their true ramp rates is to separate the stages of submitting the bids on ramp rate and production in this paper we distinguish two types of market structures one stage when electric power producers are deciding their production and ramp rate at the same time or two stage when generators decide their ramp rate first and choose their production levels at the second stage we employ one stage and two stage equilibrium models respectively to represent these market setups and use a conjectured price response parameter ranging from perfect competition to the cournot oligopoly to investigate the effect of the market competition structure on the strategic decisions of the generators we compare these two market setups in a symmetric duopoly case with two time periods and prove that in the two stage market setup the level of ramp rate is independent of the strategic behavior in the spot market and generally lower than the one offered in the one stage setup we also show that the ramp rate levels in one and two stage models coincide at the cournot oligopoly we extend the model to asymmetry several load periods portfolio bidding and uncertainty and show that withholding the ramp rate still occurs in both models our findings prove that market regulators cannot rely on only separating the decision stages as an effective measure to mitigate market power and in certain cases it may lead to an adverse effect

value based transmission expansion planning of hydrothermal systems under uncertainty transmission planning studies in hydrothermal systems deal with complex issues two include 1 the need for a robust grid that can accommodate a large number of economic dispatch patterns caused by differing hydrological conditions in the river basins and 2 the high cost of grid reinforcements due to the large distance from hydro plants to load centers and the required n l security criterion it is thus necessary to consider the tradeoff between supply reliability and reinforcement cost the resulting planning problem is formulated as a large scale mixed integer nonlinear optimization model the objective function is to minimize the sum of investment costs and expected load shedding costs the constraints include linearized power flow equations limits on circuit flows for all combinations of economic dispatch points which capture hydrological variation and circuit contingencies which capture supply reliability this paper describes a new solution scheme for this problem that is based on two techniques 1 the extension of a binary disjunctive technique which transforms the integer nonlinear problem into a linear one and 2 screening strategies which allow a judicious choice of contingencies and candidate circuits planning studies for brazil and bolivia are presented and discussed

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part i an exact bilevel programming approach the first of this two paper series addresses a practical day ahead auction model where generation revenue constraints are explicitly incorporated in the problem formulation as routinely done in several national electricity markets across europe the revenue constrained market clearing procedure includes the effect of the transmission network inter temporal constraints associated with generation scheduling demand side bidding and marginal pricing this auction design is an instance of price based market clearing which features two major complicating factors first locational marginal prices become decision variables of the optimization process in addition producer revenues are formulated as bilinear and highly nonconvex products of power outputs and market clearing prices the resulting problem is formulated as a mixed integer nonlinear bilevel program with bilinear terms for which available solution techniques rely on heuristics approximations or modeling simplifications this paper presents a novel and exact methodology whereby the original problem is recast as an equivalent single level mixed integer linear program as a consequence finite convergence to optimality is guaranteed and the use of standard commercial software is allowed the proposed transformation is based on duality theory of linear programming karush kuhn tucker optimality conditions and integer algebra results in the second part of this two paper series numerical results from several case studies illustrate the effective performance of the proposed solution approach

security constrained unit commitment with ac constraints in a restructured power market the independent system operator iso executes the security constrained unit commitment scuc program to plan a secure and economical hourly generation schedule for the day ahead market this paper introduces an efficient scuc approach with ac constraints that obtains the minimum system operating cost while maintaining the security of power systems the proposed approach applies the benders decomposition for separating the unit commitment uc in the master problem from the network security check in subproblems the master problem applies the augmented lagrangian relaxation lr method and dynamic programming dp to solve uc the subproblem checks ac network security constraints for the uc solution to determine whether a converged and secure ac power flow can be obtained if any network violations arise corresponding benders cuts will be formed and added to the master problem for solving the next iteration of uc the iterative process will continue until ac violations are eliminated and a converged optimal solution is found in this paper a six bus system and the ieee 118 bus system with 54 units are analyzed to exhibit the effectiveness of the proposed approach

market based coordination of transmission and generation capacity planning we propose an iso model for coordinating transmission expansion planning with competitive generation capacity planning in electricity markets the purpose of the model is a holistic simulation of generation and transmission capacity expansion in the market environment the solution represents an iterative process for simulating the interactions among gencos transcos and the iso which might be terminated by the iso based on a pre specified stopping criterion the proposed model adopts a joint energy and transmission auction market and a capacity mechanism the joint auction market enables competition to occur among generation and transmission resources the capacity mechanism offers incentives for market participant investments that reflect the locational values of additional capacity transmission capacity expansion decisions are made by merchant transmission lines that recover their capacity investments through transmission marginal pricing and capacity payments transmission network security is reflected in the proposed competitive resource planning model the examples illustrate a coordinated planning of generation and transmission in restructured power systems

trade diversion from tomato suspension agreements trade barriers can cause output to be diverted to other countries and into other products we study the effect of a voluntary price restraint vpr on mexican tomatoes entering the united states the diversion caused by the vpr is statistically and economically significant representing over four fifths of the direct effects of the trade barrier when the vpr was binding mexico exported more tomatoes to canada the united states cut back on exports while canada increased their exports to the united states the vpr also diverted fresh tomatoes in mexico into paste production which was then exported to the united states des barrieres commerciales peuvent entrainer la diversion de l output vers d autres pays ou d autres productions on etudie la diversion causee par les accords de restriction volontaire des prix arvp des tomates mexicaines entrant sur le marche americain la diversion causee par les arvp a ete statistiquement et economiquement significative representant plus des quatre cinquiemes des effets directs de la barriere tarifaire quand les arvp ont ete contraignants le mexique a exporte plus de tomates au canada les etats unis ont reduit leurs exportations alors que le canada augmentait ses exportations vers les etats unis les arvp ont aussi entraine une diversion des tomates fraiches au mexique vers la production de puree de tomate un produit qui a alors ete exporte vers les etats unis

estimating the performance effects of business groups in emerging markets business groups confederations of legally independent firms are ubiquitous in emerging economies yet very little is known about their effects on the performance of affiliated firms we conceive of business groups as responses to market failures and high transaction costs in doing so we develop hypotheses about the effects of group affiliation on firm profitability affiliation could either boost or depress firm profitability and members of a group are likely to earn rates of return similar to other members of the same group using a unique data set compiled largely from local sources we test for these effects in 14 emerging markets argentina brazil chile india indonesia israel mexico peru the philippines south africa south korea taiwan thailand and turkey we find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine group affiliation appears to have as profound an effect on profitability as does industry membership yet strategy scholars have a much clearer grasp of industries than of groups moreover membership in a group raises the profitability of the average group member in several of the markets we examine this runs contrary to the wisdom conventional in advanced economies that unrelated diversification depresses profitability overall our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts conclusions drawn in one context may well not apply to another copyright 2001 john wiley sons ltd

modeling strategic investment decisions in spatial markets abstract markets for natural resources and commodities are often oligopolistic in these markets production capacities are key for strategic interaction between the oligopolists we analyze how different market structures influence oligopolistic capacity investments and thereby affect supply prices and rents in spatial natural resource markets using mathematical programming models the models comprise an investment stage and a supply stage in which players compete in quantities we compare three models a perfect competition and two cournot models in which the product is either traded through long term contracts or on spot markets in the supply stage tractability and practicality of the approach are demonstrated in an application to the international metallurgical coal market results may vary substantially between the different models the metallurgical coal market has recently made progress in moving away from long term contracts and more towards spot market based trade based on our results we conclude that this regime switch is likely to raise consumer rents but lower producer rents while the effect on total welfare is negligible

assessing market structures in resource markets an empirical analysis of the market for metallurgical coal using various equilibrium models abstract the prevalent market structures found in many resource markets consist of high concentration on the supply side and low demand elasticity market results are therefore frequently assumed to be an outcome of strategic interaction between producers common models to investigate the market outcomes and underlying market structures are games representing competitive markets strategic cournot competition and stackelberg structures that take into account a dominant player acting first followed by one or more players we add to the literature by expanding the application of mathematical models and applying an equilibrium problem with equilibrium constraints epec which is used to model multi leader follower games to a spatial market using our model we investigate the prevalent market setting in the international market for metallurgical coal between 2008 and 2010 whose market characteristics provide arguments for a wide variety of market structures using different statistical measures to compare model results with actual market outcomes we find that two previously neglected settings perform best first a setting in which the four largest metallurgical coal exporting firms compete against each other as stackelberg leaders while the remainders act as cournot followers second a setting with bhpb acting as sole stackelberg leader

investigating the ability of demand shifting to mitigate electricity producers market power previous work on the role of the demand side in imperfect electricity markets has demonstrated that its self price elasticity reduces electricity producers ability to exercise market power however the concept of self price elasticity cannot accurately capture consumers flexibility as the latter mainly involves shifting of loads operation in time this paper provides for the first time theoretical and quantitative analysis of the beneficial impact of demand shifting ds in mitigating market power by the generation side quantitative analysis is supported by a multiperiod equilibrium programming model of the imperfect electricity market accounting for the time coupling operational constraints of ds as well as network constraints the decision making process of each strategic producer is modeled through a bi level optimization problem which is solved after converting it to a mathematical program with equilibrium constraints mpec and linearizing the latter through suitable techniques the oligopolistic market equilibria resulting from the interaction of multiple independent producers are determined by employing an iterative diagonalization method case studies on a test market reflecting the general generation and demand characteristics of the gb system quantitatively demonstrate the benefits of ds in mitigating producers market power by employing relevant indexes from the literature

marginal pricing of transmission services an analysis of cost recovery this paper presents an in depth analysis of network revenues computed with marginal pricing and in particular it investigates the reasons why marginal prices fail to recover the total incurred network costs in actual power systems the basic theoretical results are presented and the major causes of the mismatch between network costs and marginal revenues are identified and illustrated with numerical examples some tutorial and others of realistic size the regulatory implications of marginal network pricing in the context of competitive electricity markets are analyzed and suggestions are provided for the meaningful allocation of the costs of the network among its users

coordination of generation and transmission development through generation transmission charges a game theoretical approach transmission charges aim to recover the cost of transmission network investments and provide efficient locational signals to new generators in this paper we investigate the effect of these charges on the development of new generation capacities in the system generation expansion planning is decided by strategic generation planners sgps trying to maximize their profits while transmission line investments are planned by a central planner and regulatory body aimed at minimizing the overall operation and network investment costs of the system regulatory transmission charges rtcs are calculated according to the marginal responsibility of generation investment on transmission network investment costs an iterative algorithm is proposed to model the interaction taking place between the central planner and sgps the developed methodology is applied to a 2 node illustrative example and the ieee rts96 and effects of rtcs on investment decisions of sgps are analyzed

electricity market near equilibrium under locational marginal pricing and minimum profit conditions this paper provides a tool to determine the near equilibrium of an electric energy market this market works under locational marginal pricing i e generating units and demand loads are paid and pay respectively the locational marginal prices corresponding to the nodes they are connected to the near equilibrium is defined as the energy transaction levels for which generating companies maximize their respective profits and consumption companies maximize their respective utilities an independent system operator clears the market maximizing the social welfare conditions that ensure minimum profit for generating units can be included however these conditions may render a generating unit uncompetitive and expel it from the market demands are taken to be non constant and values are determined as part of the solution the near equilibrium is obtained through the solution of a mixed integer quadratic problem equivalent to a mixed linear complementarity problem that includes the minimum profit conditions it is important to note that the near equilibrium concept presented in this paper does not solve a market equilibrium when indivisibilities such as start up costs or the like are present lastly we validate the proposed model on a case study using data from the ieee reliability test system

an individual welfare maximization algorithm for electricity markets an algorithm that allows a market participant to maximize its individual welfare in electricity spot markets is presented the use of the algorithm in determining market equilibrium points called nash equilibria is demonstrated the start of the algorithm is a spot market model that uses the optimal power flow opf with a full representation of the transmission system and inclusion of consumer bidding the algorithm utilizes price and dispatch sensitivities available from the hessian matrix and gradient of the opf to help determine an optimal change in an individual s bid the algorithm is shown to be successful in determining local welfare maxima and the prospects for scaling the algorithm up to realistically sized systems are very good nash equilibria are investigated assuming all participants attempt to maximize their individual welfare this is done by iteratively solving the individual welfare maximization algorithm until all individuals stop modifying their bids

a bilevel model for electricity retailers participation in a demand response market environment abstract demand response programmes are seen as one of the contributing solutions to the challenges posed to power systems by the large scale integration of renewable power sources mostly due to their intermittent and stochastic nature among demand response programmes real time pricing schemes for small consumers are believed to have significant potential for peak shaving and load shifting thus relieving the power system while reducing costs and risk for energy retailers this paper proposes a game theoretical model accounting for the stackelberg relationship between retailers leaders and consumers followers in a dynamic price environment both players in the game solve an economic optimisation problem subject to stochasticity in prices weather related variables and must serve load the model allows the determination of the dynamic price signal delivering maximum retailer profit and the optimal load pattern for consumers under this pricing the bilevel programme is reformulated as a single level milp which can be solved using commercial off the shelf optimisation software in an illustrative example we simulate and compare the dynamic pricing scheme with fixed and time of use pricing we find that the dynamic pricing scheme is the most effective in achieving load shifting thus reducing retailer costs for energy procurement and regulation in the wholesale market additionally the redistribution of the saved costs between retailers and consumers is investigated showing that real time pricing is less convenient than fixed and time of use price for consumers this implies that careful design of the retail market is needed finally we carry out a sensitivity analysis to analyse the effect of different levels of consumer flexibility

marginal pricing of transmission services a comparative analysis of network cost allocation methods a strict marginal network pricing policy is not able to generate enough revenues to recover the cost of the primary transmission service other related network services are ignored here this cost recovery problem requires the stipulation of a complementary charge which completes the network marginal revenues this paper evaluates numerically and qualitatively three different allocation methods of the complementary charge marginal participation factors mean participation factors and benefit factors the evaluation has been applied to the spanish electrical system model

auction design in day ahead electricity markets competition in day ahead electricity markets has been established through auctions where generators and loads bid prices and quantities different approaches have been discussed regarding the market auction design multi round auctions despite its implementation complexity allow market participants to adapt their successive bids to market prices considering their operational and economic constraints however most of the day ahead electricity market implementations use noniterative single round auctions this paper presents a market simulator to compare both auction models different auction alternatives such as the spanish single round auction that takes into account special conditions included in the generator bids and multi round auctions with different stopping rules are analyzed the results and acquired experience in the simulation of the spanish market started in january 1998 are presented hourly market prices average daily price price demand correlation and several economic efficiency indicators such as generator surplus consumer surplus and social welfare are compared to derive conclusions regarding the performance of the auction alternatives

equilibria in an oligopolistic electricity pool with stepwise offer curves we study the equilibria reached by strategic producers in a pool based network constrained electricity market the behavior of each producer is modeled by a mathematical program with equilibrium constraints mpec whose objective is maximizing profit and whose complementarity constraints describe market clearing the joint solution of all these mpecs constitutes an equilibrium problem with equilibrium constraints epec the equilibria associated with the epec are analyzed by solving the strong stationarity conditions of all mpecs which can be linearized without approximation by mixed integer linear programming milp techniques the resulting mixed integer linear conditions can be reformulated as an optimization problem that allows establishing diverse objectives to differentiate among alternative equilibria

business groups and social welfare in emerging markets existing evidence and unanswered questions abstract this paper reviews existing studies of the role of emerging market business groups a ubiquitous but poorly understood organizational form i first suggest that understanding the definition of business groups is itself an interesting albeit under studied research issue i then argue that the existing evidence suggests that the performance effects of group affiliation are large and generally positive there is substantial evidence that part of this is due to welfare enhancing functions originating in the idea that groups substitute for missing outside institutions but that part is also due to welfare reducing minority shareholder exploitation evidence is lacking on the extent to which groups facilitate rent seeking or the exercise of market power evidence is also lacking on the extent to which groups hamper the future development of markets the paper identifies areas where research is needed before current competition policy experiments in countries like china india and korea can be evaluated

exercise of market power on ramp rate in wind integrated power systems with an increasing penetration of wind power there is likely to be an increasing need for fast ramping generating units these generators ensure that no load is lost if supply drops due to the uncertainties in wind power generation however it is observed in practice that in a presence of network constraints fast ramping generating units are prone to act strategically and exercise market power by withholding their ramp rates in this paper we model this gaming behavior on ramp rates we assume a market operator who collects bids in form of marginal costs quantities and ramp rates he runs a ramp constrained economic dispatch given the generators bids forecasted demand and contingencies following the game theoretic concepts we set up a multi level optimization problem the lower level problem is the ramp constrained economic dispatch and the higher level represents the profit maximization problems solved by strategic generators the whole problem is formulated as an equilibrium problem with equilibrium constraints epec the outcome of the epec problem is a set of nash equilibria to tackle the multiple nash equilibria problem the concept of the extremal nash equilibria is defined and formulated we model the concept of extremal nash equilibria as a single stage mixed integer linear programming problem milp and demonstrate the application of this mathematical framework on an illustrative case and on a more realistic case study with tractable results

contingency constrained reserve requirements in joint energy and ancillary services auction this paper presents a security constrained unit commitment model for energy and ancillary services auction which can be used by an iso to optimize reserve requirements in electricity markets the proposed day ahead algorithm determines reserve requirements by simulating contingencies rather than specifying the requirements as fixed system constraints to address the computational complexity the original auction problem is decomposed into a master problem for solving unit commitment and subproblems for considering network security constraints numerical examples show that the proposed joint auction model can clear energy and ancillary services bids simultaneously while minimizing the total operating cost and satisfying transmission security constraints

finding equilibria in the pool based electricity market with strategic wind power producers and network constraints this paper proposes a model to find the equilibria in the short term electricity market with large scale wind power penetration the behavior of each strategic player is modeled through a two stage mathematical problem with equilibrium constraints mpec where the upper level problem maximizes the profit of the strategic player and the lower level problem describes the clearing processes of the day ahead and real time markets while considering the network constraints the joint solution of all the mpecs constitutes an equilibrium problem with equilibrium constraints epec the uncertain wind power production and demand are represented by a set of plausible scenarios by using the duality theory and karush kuhn tucker condition each mpec is transferred into a mixed integer linear programing problem the nash equilibria of the electricity market are obtained by solving the epec using game theory and the diagonalization algorithm case studies are performed to show the effectiveness of the proposed model

national strategic investment in european power transmission capacity abstract the transformation of the european electricity system requires substantial investment in transmission capacity to facilitate cross border trade and to efficiently integrate renewable energy sources however network planning in the eu is still mainly a national prerogative in contrast to other studies aiming to identify the pan european continental welfare optimal transmission expansion we investigate the impact of zonal planners deciding on network investment strategically with the aim of maximizing the sum of consumer surplus generator profits and congestion rents in their jurisdiction this reflects the inadequacy of current mechanisms to compensate for welfare re allocations across national boundaries arising from network upgrades we propose a three stage equilibrium model to describe the nash game between zonal planners i e national governments regulators or system operators each taking into account the impact of network expansion on the electricity spot market and the resulting welfare effects on the constituents within its jurisdiction we propose a novel way to solve the resulting gne epec type problem using a variation of a disjunctive constraints reformulation this allows to solve this problem without a priori assumptions on the relative valuation of shared constraints by each player using a four node sample network we identify several nash equilibria of the game between the zonal planners this example illustrates the failure to reach the first best welfare expansion in the absence of an effective framework for cross border cost benefit allocation

agent based modeling in electrical energy markets using dynamic bayesian networks due to uncertainties in generation and load optimal decision making in electrical energy markets is a complicated and challenging task participating agents in the market have to estimate optimal bidding strategies based on incomplete public information and private assessment of the future state of the market to maximize their expected profit at different time scales in this paper we present an agent based model to address the problem of short term strategic bidding of conventional generation companies gencos in a power pool based on the proposed model each genco agent develops a private probabilistic model of the market using dynamic bayesian networks employs an online learning algorithm to train the model sparse bayesian learning and infers the future state of the market to estimate the optimal bidding function we show that by using this multiagent framework the agents will be able to predict and adapt to approximate nash equilibrium of the market through time using local reasoning and incomplete publicly available data the model is implemented in matlab and is tested on four test case systems two generic systems with 5 and 15 genco agents and two ieee benchmarks 9 bus and 30 bus systems both the day ahead da and hour ahead ha bidding schemes are implemented the results show a drop in market power in the 15 agent system compared to 5 agent system along with a pareto superior equilibrium in the ha scheme compared to the da scheme which corroborates the validity of the proposed decision making model also the simulations show that introduction of an ha decision making stage as an uncertainty containment tool leads to a more stable and less volatile price signal in the market which consequently results in flatter and improved profit curves for the gencos

strategic generation investment using a complementarity approach this paper provides a methodology to assist a strategic producer in making informed decisions on generation investment a single target year is considered with demand variations modeled through blocks the strategic behavior of the producer is represented through a bilevel model the upper level considers both investment decisions and strategic production actions and the lower level corresponds to market clearing prices are obtained as dual variables of power balance equations rival uncertainties on offering and investment are characterized through scenarios the resulting model is a large scale mixed integer lp problem solvable using currently available branch and cut techniques results pertaining to an illustrative example and a case study are reported and discussed

simple but sound methods for estimating the value of changes in biodiversity for biological pest control in agriculture abstract recent meta analyses indicate that an increase in the number of natural enemy species raises the overall effectiveness of biological control of insect pests in agricultural settings although economic valuations of biological pest control in agriculture show an impressive cost savings from this ecosystem service no direct estimate of the value of biodiversity for biological control has been attempted we apply a basic microeconomic model for estimating the value of changes in the richness of arthropod natural enemies or in functional diversity for biological pest control for two sample crops using experimental results reported in the ecological literature market based outcomes were driven by changes in crop yields associated with experimental reductions in natural enemy species richness and modified by supply shifts and price elasticities we show how our simple model differs from common approaches used in the ecological literature and explain why this alternative model more accurately estimates societal well being for consumers and producers participating in these crop markets we conclude by discussing the additional research and data needed to make economic valuation of ecosystem services in agricultural settings more feasible rigorous and realistic in the future

generation capacity expansion in liberalized electricity markets a stochastic mpec approach 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

risk constrained scheduling and offering strategies of a price maker hydro producer under uncertainty this paper presents a stochastic mixed integer linear programming smilp approach to maximize total expected profit of one price maker hydro producer in a pool based electricity market head dependence commitment decisions discharge ramping startup costs and forbidden zones are all effectively handled in our approach uncertainty about the competitors offers is adequately represented by residual demand curves rdcs scenarios the management of risk is suitably addressed by conditional value at risk cvar to provide the efficient frontier i e the solutions set for which the expected profit may not be augmented without enlarging the variance of profit appropriate offering strategies to the pool are also developed consisting of supply functions built for different risk levels a representative cascaded hydro system with 7 reservoirs is considered to analyze and compare risk neutral versus risk averse results

strategic bidding under uncertainty a binary expansion approach this work presents a binary expansion be solution approach to the problem of strategic bidding under uncertainty in short term electricity markets the be scheme is used to transform the products of variables in the nonlinear bidding problem into a mixed integer linear programming formulation which can be solved by commercially available computational systems the be scheme is applicable to pure price pure quantity or joint price quantity bidding models it is also possible to represent transmission networks uncertainties scenarios for price quantity plant availability and load financial instruments capacity reinforcement decisions and unit commitment the application of the methodology is illustrated in case studies with configurations derived from the 80 gw brazilian system

finding multiple nash equilibria in pool based markets a stochastic epec approach we present a compact formulation to find all pure nash equilibria in a pool based electricity market with stochastic demands the equilibrium model is formulated as a stochastic equilibrium problem subject to equilibrium constraints epec the problem is based on a stackelberg game where the generating companies gencos optimize their strategic bids anticipating the solution of the independent system operator iso market clearing a finite strategy approach both in prices and quantities is applied to transform the nonlinear and nonconvex set of nash inequalities into a mixed integer linear problem milp a procedure to find all nash equilibria is developed by generating holes that are added as linear constraints to the feasibility region the result of the problem is the set of all pure nash equilibria and the market clearing prices and assigned energies by the iso a case study illustrates the methodology and proper conclusions are reached

a simple regulatory incentive mechanism applied to electricity transmission pricing and investment the informationally simple approach to incentive regulation applies mechanisms that translate the regulator s objective function into the firm s profit maximizing objective these mechanisms come i

price maker self scheduling in a pool based electricity market a mixed integer lp approach this paper addresses the self scheduling problem faced by a price maker to achieve maximum profit in a pool based electricity market an exact and computationally efficient mixed integer linear programming milp formulation of this problem is presented this formulation models precisely the price maker capability of altering market clearing prices to its own benefits through price quota curves no assumptions are made on the characteristics of the pool and its agents a realistic case study is presented and the results obtained are analyzed in detail

economic criteria for planning transmission investment in restructured electricity markets from an economic perspective a common criterion for assessing the merits of a transmission investment is its impacts on social welfare the underlying assumption in using this criterion is that side payments may be used to distribute the social gains among all market players in reality however since the impacts of an electricity transmission project on different players may vary such side payments are rather difficult to implement this paper focuses on different economic criteria that should be considered when planning electricity transmission investments we propose an electricity transmission investment assessment methodology that is capable of evaluating the economic impacts on the various effected stakeholders and account for strategic responses that could enhance or impede the investment s objectives we formulate transmission planning as an optimization problem under alternative conflicting objectives and investigate the policy implications of divergent expansion plans resulting from the planner s level of anticipation of strategic responses we find that optimal transmission expansion plans may be very sensitive to supply and demand parameters we also show that the transmission investments have significant distributional impact creating acute conflicts of interests among market participants we use a 32 bus representation of the main chilean grid to illustrate our results

strategic bidding for price taker hydroelectricity producers this paper introduces a stochastic programming model that integrates strategic bids or offers for electricity in quantities and prices in a deregulated electricity market the model is designed to maximize the profits of a producer of electricity who manages a series of power plants along a river the model is compared with a previously reported stochastic model where the bidding process is disregarded the superiority of the new model is empirically demonstrated on historical data

linear complementarity models of nash cournot competition in bilateral and poolco power markets two cournot models of imperfect competition among electricity producers are formulated as mixed linear complementarity problems lcps and a simple example is presented to illustrate their application the two models simulate bilateral markets the models include a congestion pricing scheme for transmission but other transmission pricing approaches can also be represented in this framework the two models differ from each other in that one has no arbitrage between nodes of the network while in the other model arbitragers erase any noncost based differences in price the latter bilateral model turns out to be equivalent to a cournot model of a poolco the models differ from other cournot market models in that they include both of kirchhoff s laws via a dc approximation can include arbitragers possess unique solutions and are readily solved by efficient lcp algorithms the key assumption that permits their formulation as lcps is that each producer naively assumes that its output will not affect transmission prices

a robust linear approach for offering strategy of a hybrid electric energy company this paper presents a new approach for determining the day ahead bidding strategies of a large scale hybrid electric energy company the company has both energy generation and energy retailing businesses in a competitive electricity market demand response programs are also considered in the retail side of the company in order to hedge the risk of participation in wholesale market this paper introduces a max min bilevel mathematical programming with equilibrium constraint model for offering a strategy that manages the risk of uncertain forecasted rivals bids by robust optimization the max min bilevel model is converted to its equivalent single level optimization using karush kuhn tucker optimality conditions the duality theory is utilized to find the equivalent ordinary maximization model of the max min problem strong duality theory and big m method are also used to linearize the final model of offering strategy applicability of the proposed approach is shown by implementing it on the ieee 118 bus test system

risk constrained bidding strategy with stochastic unit commitment this paper develops optimal bidding strategies based on hourly unit commitment in a generation company genco that participates in energy and ancillary services markets the price based unit commitment problem with uncertain market prices is modeled as a stochastic mixed integer linear program the market price uncertainty is modeled using the scenario approach monte carlo simulation is applied to generate scenarios scenario reduction techniques are applied to reduce the size of the stochastic price based unit commitment problem and postprocessing is applied based on marginal cost of committed units to refine bidding curves the financial risk associated with market price uncertainty is modeled using expected downside risk which is incorporated explicitly as a constraint in the problem accordingly the proposed method provides a closed loop solution to devising specific strategies for risk based bidding in a genco illustrative examples show the impact of market price uncertainty on genco s hourly commitment schedule and discuss the way gencos could decrease financial risks by managing expected payoffs

discussion of hydrothermal market simulator using game theory assessment of market power the game theoretic model of cournot competition among owners of both thermal generation and reservoir constrained hydro facilities in an electricity market is similar to the papers of scott and read 1 and bushnell 2 the work here 3 offers a slightly different solution approach and an interesting application to data representing the circumstances in the chilean market a comparison of the results of these other markets new zealand and western u s respectively would be useful to understand the implications of small modeling differences in particular the bushnell model exploits a formulation as a linear complementarity problem which provides well known numerical procedures and a framework for analyzing the uniqueness of solutions villar and rudnick here motivate the contrast with chile s existing cost based pool by considering the example of the california market design of 1998 to 2000 however the california model includes much more and much that is not relevant to the analysis here given the problems of the california design it might be tempting to dismiss this paper but this would be a mistake the model analyzed here would be applicable for the market design in chile with only the move to a bid based rather than an audited cost based coordinated spot market the paper simplifies the analytical problem in two prominent features first the model assumes away the effects of transmission networks and the associated transmission constraints second the model employs the cournot assumption although the authors assert that something like the supply function equilibrium model would be closer to the observed behavior in the from of bid functions hence the role of the analysis is topro vide insight in tothe nature o f the strategic interactions rather than provide conclusive estimates of the magnitude of the exercise of market power hence the real value is in the authors interpretations and explanations of the results the analysis of physical and financial contracts and their effects on market power is a familiar result both types of contracts reduce the incentive toexercise seller s market po wer in the spo t market a novel result here about the greater volatility of the financial contracts flows from a particular modeling assumption in this model there is exact performance on physical contracts and therefore no effects of a failure to perform on a contract in reality of course failure to perform is normal through over or underdelivery to some degree depending on the balancing rules and payments this could eliminate any analytical difference between the contract types

a transmission planning framework considering future generation expansions in electricity markets this paper proposes a transmission planning framework in a market environment in which only the generation sector is deregulated the proposed framework is based on modeling generation companies gencos strategic behavior and anticipating their expansion patterns from the viewpoint of a transmission system planner the transmission expansion planning problem in this paper is modeled as a four level optimization problem a solution method based on agent based systems and search based optimization techniques is proposed to determine the optimal transmission expansion plan

market power assessment and mitigation in hydrothermal systems the objective of this paper is to investigate market power issues in bid based hydrothermal scheduling initially market power is simulated with a single stage nash cournot equilibrium model market power assessment for multiple stages is then carried through a stochastic dynamic programming scheme the decision in each stage and state is the equilibrium of a multi agent game thereafter mitigation measures specially bilateral contracts are investigated case studies with data taken from the brazilian system are presented and discussed

multimarket optimal bidding for a power producer this paper considers a profit maximizing thermal producer that participates in a sequence of spot markets namely day ahead automatic generation control agc and balancing markets the producer behaves as a price taker in both the day ahead market and the agc market but as a potential price maker in the volatile balancing market the paper provides a stochastic programming methodology to determine the optimal bidding strategies for the day ahead market uncertainty sources include prices for the day ahead and agc markets and balancing market linear price variations with the production of the thermal producer results from a realistic case study are reported and analyzed conclusions are duly drawn

a simulation model for a competitive generation market the simulation of a wholesale electricity market should go beyond a simple optimization based on the operating costs of the generating units a model of a competitive electricity market must consider the market structure the strategy of the market participants and any other factor that lead to prices different from costs this paper presents cosmee a model of a wholesale electricity market based on simple bids that estimates expected bid prices and quantities system hourly prices and generation schedules taking into account the bidding strategies of generators and the structure of the market the model reflects the profit maximizing behavior of the market agents subject to different types of constraints cosmee has been used to simulate a real wholesale market

optimal bidding strategies for hydro electric producers a literature survey in a competitive environment with bid based markets power generation companies desire to develop bidding strategies that maximize their revenue in this paper we ask what approaches and methodologies have been used to model the bidding problem for hydro electric producers we present the problem s developments over time and through reviewing different variants of the problem progressively build to the case in which the agent is a price maker hydro electric producer in each variant of the bidding problem we examine how the approaches used to solve it may or may not be applicable to other variants last for the price maker hydro electric producer s bidding problem we recognize the most recent developments and illuminate a path for future efforts