Author(s)

Helena Sofia Rodrigues, Maria Teresa Torres Monteiro, António Ismael Freitas Vaz

Department of Production and Systems, University of Minho, Portugal.
School of Business Studies, Viana do Castelo Polytechnic Institute, Portugal.

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.

Electric Power, Stackelberg Game, Nonlinear Programming, Complementarity Constrained Optimization

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.