Analysis of Power System Operations with Non-Dominant Firms

Yihsu Chen (), Afzal S. Siddiqui and Makoto Tanaka
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Yihsu Chen: University of California, Santa Cruz
Afzal S. Siddiqui: University College London

Chapter Chapter 4 in Analysis of Environmental Policy in the Power Sector, 2020, pp 39-70 from Springer

Abstract: Abstract Bottom-up power market models based upon economic principles with incorporation of engineering details, such as the transmission grid, and calibrated with real market data are powerful tools for market and policy analysis. This chapter describes a step-by-step process to build a power market model when there is no dominant firm in the market. We begin with a single-area cost-minimization problem when the market under consideration is subject to fixed demand. The chapter then introduces how to reformulate the problem as a social-surplus-maximization problem through parameterized demand curves. This chapter next illustrates a decentralized way of solving the model by formulating it as a complementarity problem. We conclude this chapter by pointing out how the models can be extended to study other energy and environmental policies such as renewable portfolio standards and tradable performance-based standards.

Date: 2020
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DOI: 10.1007/978-3-030-44866-0_4

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