Multiple Nash Equilibria in Electricity Markets with price-making Hydrothermal Producers

Abstract

This paper proposes a novel approach incorporating scheduling decisions into a multinodal multiperiod Cournot game. Through applying the Nikaido-Isoda function, market clearing is conducted without dual values being required. Maps of Nash equilibria are obtained through a branch-and-cut algorithm, based on tailored cutting rules. A case study of inertial response requirements shows that these maps and the resulting range of potential player profits can be used to analyze the impacts of policy decisions influenced by discontinuous variables. The case study also shows the financial impact on neighboring producers to the node with applied inertial response requirements.