2014/03/28 by Subhonmesh Bose, Desmond Cai, Bose, Subhonmesh +5
Economics, Econometrics and Finance · Engineering · #Climate Change Policy and Economics #Computer Science and Game Theory (cs.GT) #Electric Power System Optimization #FOS: Computer and information sciences #Smart Grid Energy Management
paper · pdf · doi:10.48550/arxiv.1403.7286
openalex publication_date 2014/03/28 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We study the role of a market maker (or market operator) in a transmission constrained electricity market. We model the market as a one-shot networked Cournot competition where generators supply quantity bids and load serving entities provide downward sloping inverse demand functions. This mimics the operation of a spot market in a deregulated market structure. In this paper, we focus on possible mechanisms employed by the market maker to balance demand and supply. In particular, we consider three candidate objective functions that the market maker optimizes - social welfare, residual social welfare, and consumer surplus. We characterize the existence of Generalized Nash Equilibrium (GNE) in this setting and demonstrate that market outcomes at equilibrium can be very different under the candidate objective functions.