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.