Application of Games Theory in Modelling of Nigerian Electricity Market

M. Y. Jumba, Y. S. Haruna, U. O. Aliyu and A. L. Amao
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M. Y. Jumba: Federal Polytechnic, Bauchi.
Y. S. Haruna: Abubakar Tafawa Balewa University, Bauchi
U. O. Aliyu: Abubakar Tafawa Balewa University, Bauchi
A. L. Amao: Abubakar Tafawa Balewa University, Bauchi

International Journal of Research and Scientific Innovation, 2024, vol. 11, issue 5, 1129-1140

Abstract: The Nigerian deregulated power system is fabled to be one of the boldest privatization initiatives in the global power sector in the last decade, with transaction cost of about 1500 billion Naira ($3.0billion). Though both in theory and practice Electricity market practice is like every other market, where trading between two or more participants mutual contract based on demand and economic strength. Nigerian electricity market model is a unique whole sale power market based on Multi-Year Tariff Order (MYTO) that provided arbitrary percentage power allocation scheme, instead of bilateral contract approach as obtainable in similar market models globally. The consequence of this policy is power rejection by the DISCOS, which led into congestion, energy poverty, serious damage to equipment’s of the Transmission Company of Nigeria; as well as poor marketing performance across all segment of the Nigerian Electricity Supply Industry. In this paper, games theory has been used in modelling of the Nigerian Electricity Supply Industry market, by applied a cooperative competitive zonal market incorporating intraday to the model, the outcome results of game analysis showed that the market value ratio at best response stand at 575.5:202.2, the consumer’s surplus value was N151, 234.6, the total surplus N195, 343.6, the wholesale price is N 4.625/kWh, while that of the retail is N 8/kWh; the equilibrium quantity stands at 16,000 kWh.

Date: 2024
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