This paper explores a model that may be used in driving the decisions of generator companies for strategies to be pursued in the competitive sector of the Russian electricity market for day-ahead electric energy and power deliveries. A mathematical economics model of the market was developed to test various strategies for placing offers into the trading system, including a strategy based on marginal cost pricing, strategies involving the exercise of market power by withdrawing available power physically or financially, and a mixed strategy. Our yardstick for choosing the optimum strategy was the daily profit earned by the generator. For computation, the model was fed with a sample of online generating capacity of electric utilities operating within the South Russian Unified Power System operations zone.

This paper article analyses the application of mathematical approach (represented by the game theory) in the competitive sector of the wholesale power and capacity market on the day-ahead market. We propose the mathematical algorithm for 7766 Evgeny Lisin et al. selecting the best generating company strategy that allows us to take into account the possible effects of regulators responses. We show that the daily profit of the generating company constitutes a criterion for selecting the best game strategy.