A Review on the Complementarity Modelling in Competitive Electricity Markets

Christos N. Dimitriadis, Evangelos G. Tsimopoulos and Michael C. Georgiadis
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Christos N. Dimitriadis: Department of Chemical Engineering, School of Engineering, Aristotle University of Thessaloniki, P.O. Box 455, 54124 Thessaloniki, Greece
Evangelos G. Tsimopoulos: Department of Chemical Engineering, School of Engineering, Aristotle University of Thessaloniki, P.O. Box 455, 54124 Thessaloniki, Greece
Michael C. Georgiadis: Department of Chemical Engineering, School of Engineering, Aristotle University of Thessaloniki, P.O. Box 455, 54124 Thessaloniki, Greece

Energies, 2021, vol. 14, issue 21, 1-27

Abstract: In recent years, the ever-increasing research interest in various aspects of the electricity pool-based markets has generated a plethora of complementarity-based approaches to determine participating agents’ optimal offering/bidding strategies and model players’ interactions. In particular, the integration of multiple and diversified market agents, such as conventional generation companies, renewable energy sources, electricity storage facilities and agents with a mixed generation portfolio has instigated significant competition, as each player attempts to establish their market dominance and realize substantial financial benefits. The employment of complementarity modelling approaches can also prove beneficial for the optimal coordination of the electricity and natural gas market coupling. Linear and nonlinear programming as well as complementarity modelling, mainly in the form of mathematical programs with equilibrium constraints (MPECs), equilibrium programs with equilibrium constraints (EPECs) and conjectural variations models (CV) have been widely employed to provide effective market clearing mechanisms, enhance agents’ decision-making process and allow them to exert market power, under perfect and imperfect competition and various market settlements. This work first introduces the theoretical concepts that regulate the majority of contemporary competitive electricity markets. It then presents a comprehensive review of recent advances related to complementarity-based modelling methodologies and their implementation in current competitive electricity pool-based markets applications.

Keywords: complementarity; electricity markets; natural gas market coupling; MPEC; EPEC; conjectural variations; electricity storage; renewable energy sources (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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