Multiperiod Competition in an Electric Power Network and Impacts of Infrastructure Disruptions

Abstract

This paper puts forth a dynamic, game theoretic model of oligopolistic competition in electric power markets. The purpose of this model is to allow one to quickly and efficiently test the effects of changes to the capacity of the underlying electric power network. Therefore, the game is formulated as a nonlinear complementarity problem, which may be solved very efficiently. Transmission of power on the underlying electric power network is represented by the widely accepted linearized DC flow approximation, allowing the substitution of power transmission distribution factors for Kirchoff’s energy balance and voltage laws. The model is tested on a 15 node representation of the northwest European electricity market formed by Belgium, France, Germany, and The Netherlands. Numerical examples involving disruptions to both transmission and generation capacity are considered and the Braess paradox is observed.