A Game Theory Decision Theoretical Tool for Assessing Electrical Power Distribution Markets

The paper deals with the development of a theoretical decision policy tool that can evaluate an electricity market. The system considered in the model consists of the Independent System Operator and four primary resources of electrical power in UK. Each resource is assumed to correspond to a power producer. The number of primary resources can be expanded and changed according to the market considered. The Independent System Operator (ISO) is considered to stay for an infinite time and the power resources are considered as players who stay in the system for a fixed period of four years. This time period is only indicative and the model can be also applied with different time periods. The ISO determines its basic objectives by the pricing policy in the market, taking into consideration both quantitative and qualitative characteristics of the resources (production cost, environmental impact, reliability, social impact). The power producers try to compromise with the rules that the ISO sets and improve their profits by succeeding a bigger market share. Instant situations of the grid operation such as instant gains of the Independent System Operator and producers have been studied. In this paper we analyzed the robustness of the system at consequent decisions of the players using Nash and Stackelberg model. New technologies and resources with different quality parameters gain bigger market share in European Electrical Markets. Applying the game theory tools and studying different equilibriums, new strategies for energy markets can be designed in practice.

A Game Theory Decision Theoretical Tool for Assessing Electrical Power Distribution Markets. 9th Mediterranean Conference on Power Generation, Transmission Distribution and Energy Conversion Athens, Greece.

Kakogiannis, N., Spataru, C. (2014)

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