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Strategic-Agent Equilibria in the Operation of Natural Gas and Power Markets

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  • Sheng Chen

    (College of Energy and Electrical Engineering, Hohai University, Nanjing 210098, China)

  • Antonio J. Conejo

    (Department of Integrated Systems Engineering and Department of Electrical and Computer Engineering, The Ohio State University, Columbus, OH 43210, USA)

Abstract

We consider strategic gas/power producers and strategic gas/power consumers operating in both gas and power markets. We build a flexible multi-period complementarity model to characterize day-ahead equilibria in those markets. This model is an equilibrium program with equilibrium constraints that characterizes the market behavior of all market agents. Using a realistic case study, we analyze equilibria under perfect and oligopolistic competition. We also analyze equilibria under different levels of information disclosure regarding market outcomes. We study as well equilibria under different ownership schemes: no hybrid agent, some hybrid agents, and only hybrid agents. Finally, we derive policy recommendations for the regulators of both the gas and the power markets.

Suggested Citation

  • Sheng Chen & Antonio J. Conejo, 2020. "Strategic-Agent Equilibria in the Operation of Natural Gas and Power Markets," Energies, MDPI, vol. 13(4), pages 1-17, February.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:4:p:868-:d:321407
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    References listed on IDEAS

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    1. Steven A. Gabriel & Antonio J. Conejo & J. David Fuller & Benjamin F. Hobbs & Carlos Ruiz, 2013. "Complementarity Modeling in Energy Markets," International Series in Operations Research and Management Science, Springer, edition 127, number 978-1-4419-6123-5, December.
    2. Ordoudis, Christos & Pinson, Pierre & Morales, Juan M., 2019. "An Integrated Market for Electricity and Natural Gas Systems with Stochastic Power Producers," European Journal of Operational Research, Elsevier, vol. 272(2), pages 642-654.
    3. RUIZ, Carlos & CONEJO, Antonio J. & SMEERS, Yves, 2012. "Equilibria in an oligopolistic electricity pool with stepwise offer curves," LIDAM Reprints CORE 2395, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Xinmin Hu & Daniel Ralph, 2007. "Using EPECs to Model Bilevel Games in Restructured Electricity Markets with Locational Prices," Operations Research, INFORMS, vol. 55(5), pages 809-827, October.
    5. Ameli, Hossein & Qadrdan, Meysam & Strbac, Goran, 2017. "Value of gas network infrastructure flexibility in supporting cost effective operation of power systems," Applied Energy, Elsevier, vol. 202(C), pages 571-580.
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    Cited by:

    1. Christos N. Dimitriadis & Evangelos G. Tsimopoulos & Michael C. Georgiadis, 2021. "A Review on the Complementarity Modelling in Competitive Electricity Markets," Energies, MDPI, vol. 14(21), pages 1-27, November.

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