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On Cournot Equilibria in Electricity Transmission Networks

Author

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  • A. Downward

    (Department of Engineering Science, University of Auckland, Auckland 1010, New Zealand)

  • G. Zakeri

    (Department of Engineering Science, University of Auckland, Auckland 1010, New Zealand)

  • A. B. Philpottt

    (Department of Engineering Science, University of Auckland, Auckland 1010, New Zealand)

Abstract

We consider electricity pool markets in radial transmission networks in which the lines have capacities. At each node there is a strategic generator injecting generation quantities into the pool. Prices are determined by a linear competitive fringe at each node (or equivalently a linear demand function) through a convex dispatch optimization. We derive a set of linear inequalities satisfied by the line capacities that gives necessary and sufficient conditions for the unconstrained one-shot Cournot equilibrium to remain an equilibrium in the constrained network. We discuss the extension of this model to general networks and to lines with transmission losses, and we conclude by discussing the application of this methodology to the New Zealand electricity transmission network.

Suggested Citation

  • A. Downward & G. Zakeri & A. B. Philpottt, 2010. "On Cournot Equilibria in Electricity Transmission Networks," Operations Research, INFORMS, vol. 58(4-part-2), pages 1194-1209, August.
    • Handle: RePEc:inm:oropre:v:58:y:2010:i:4-part-2:p:1194-1209
    DOI: 10.1287/opre.1100.0830
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    References listed on IDEAS

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    Cited by:

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    7. Kenneth Judd & Garrett van Ryzin, 2010. "Preface to the Special Issue on Computational Economics," Operations Research, INFORMS, vol. 58(4-part-2), pages 1035-1036, August.
    8. Pär Holmberg & Andy Philpott, 2014. "Supply function equilibria in transportation networks," Working Papers EPRG 1401, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. Mohammad Rasouli & Demosthenis Teneketzis, 2021. "Economizing the Uneconomic: Markets for Reliable, Sustainable, and Price Efficient Electricity," Sustainability, MDPI, vol. 13(8), pages 1-38, April.
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