A MPCC-NLP Approach for an Electric Power Market Problem

Abstract

The electric power market is changing-it has passed from a regulated market, where the government of each country had the control of prices, to a deregulated market economy. Each company competes in order to get more cli.e.nts and maximize its profits. This market is represented by a Stackelberg game with two firms, leader and follower, and the leader anticipates the reaction of the follower. The problem is formulated as a Mathematical Program with Complementarity Constraints (MPCC). It is shown that the constraint qualifications usually assumed to prove convergence of standard algorithms fail to hold for MPCC. To circumvent this, a reformulation for a nonlinear problem (NLP) is proposed. Numerical tests using the NEOS server platform are presented.

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H. Rodrigues, M. Monteiro and A. Vaz, "A MPCC-NLP Approach for an Electric Power Market Problem," Smart Grid and Renewable Energy, Vol. 1 No. 1, 2010, pp. 54-61. doi: 10.4236/sgre.2010.11009.

Conflicts of Interest

The authors declare no conflicts of interest.

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