Electricity market equilibrium under information asymmetry

Dvorkin, Vladimir; Kazempour, Jalal

doi:10.1016/j.orl.2019.09.005

Cited by 26 publications

(26 citation statements)

References 17 publications

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“…For example, one potential alternative is to use chance-constrained programming, resulting in a chance-constrained electricity market design (Dvorkin, 2020). In addition, it is relevant to relax the assumption of information symmetry among the market players (Dvorkin et al, 2019b), which are the interface optimizer, TSO and DSOs in this study, and explore how the resulting model can be solved and how asymmetric information among players impacts the overall social welfare. Aiming to develop a more realistic model, it is important to include inter-temporal operational constraints and additional market products in future works.…”

Section: Discussionmentioning

confidence: 99%

A complementarity model for electric power transmission-distribution coordination under uncertainty

Hermann

Jensen

Østergaard

et al. 2022

European Journal of Operational Research

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Section: Discussionmentioning

confidence: 99%

A complementarity model for electric power transmission-distribution coordination under uncertainty

Hermann

Jensen

Østergaard

et al. 2022

European Journal of Operational Research

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“…Equilibrium models have been used in the literature to analyze the non-integrated natural-gas [28] - [30] and electric power markets [31], [32]. For example, [28] analyzed the interplay of natural-gas markets and natural-gas transport in a multilevel equilibrium model considering the nonconvex physics of the natural-gas flow.…”

Section: Introductionmentioning

confidence: 99%

“…For example, [28] analyzed the interplay of natural-gas markets and natural-gas transport in a multilevel equilibrium model considering the nonconvex physics of the natural-gas flow. On the electric power market side, we may highlight the analysis in [32] where the impact of information asymmetry on the equilibrium of electric power markets was investigated. A limited number of papers such as [33]- [35] used equilibrium problem with equilibrium constraints (EPEC) and mathematical programming with equilibrium constraints (MPEC) to study the coupled naturalgas and electric power markets.…”

Section: Introductionmentioning

confidence: 99%

Equilibria in Interdependent Natural-gas and Electric Power Markets: an Analytical Approach

Mousavian

Raouf

Conejo

2021

Journal of Modern Power Systems and Clean Energy

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Natural-gas and electric power systems and their corresponding markets have evolved over time independently. However, both systems are increasingly interdependent since combined cycle gas turbines that use natural gas to produce electricity increasingly couple them together. Therefore, suitable analysis techniques are most needed to comprehend the consequences on market outcomes of an increasing level of integration of both systems. There is a vast literature on integrated natural-gas and electric power markets assuming that the two markets are operated centrally by a single operator. This assumption is often untrue in the real world, which necessitates developing models for these interdependent yet independent markets. In this vein, this paper addresses the gap in the literature and provides analytical Nash-Cournot equilibrium models to represent the joint operation of natural-gas and electric power markets with the assumption that the market participants in each market make their own decisions independently seeking the maximum profits, as often is the case in the real world. We develop an analytical equilibrium model and apply the Karush-Kuhn-Tucker (KKT) approach to obtain Nash-Cournot equilibria for the interdependent natural-gas and electric power markets. We use a double-duopoly case to study the interaction of both markets and to derive insightful analytical results. Moreover, we derive closed-form analytical expressions for spot-market equilibria in both natural-gas and electric power markets, which are relevant and of practical significance for decision makers. We complement the double-duopoly study with a detailed sensitivity analysis. Index Terms--Electric power market, natural-gas market, Nash-Cournot equilibria, analytical equilibrium model.

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“…A relevant model accounting for asymmetric information about scenarios, but without modeling risk aversion, is available in[36].…”

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confidence: 99%

Risk Trading in Energy Communities

Vespermann

Hamacher

Kazempour

2021

IEEE Trans. Smart Grid

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Local energy communities are proposed as a regulatory framework to enable the market participation of endconsumers. However, volatile local market-clearing prices, and consequently, volatile cost give rise to local market participants with generally heterogeneous risk attitudes. To prevent the increased operational cost of communities due to conservative trading decisions in the forward stage, e.g., a day-ahead market, we propose risk trading in energy communities via financial hedging products, the so-called Arrow-Debreu securities. The conditional value-at-risk serves as our risk measure for players to study different degrees of market completeness for risk. We define a risk-averse Nash game with risk trading and solve the Nash equilibrium problem for an incomplete market for risk as a mixed complementarity problem. We show that such a Nash equilibrium problem reduces to a single optimization problem if the market is complete for risk. Numerical findings indicate that a significant community cost saving can be realized when players engage in risk trading and sufficient financial hedging products are available. Moreover, risk trading efficiently protects less risk-averse players from highly risk-averse decision-making of rival players.

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Electricity market equilibrium under information asymmetry

Cited by 26 publications

References 17 publications

A complementarity model for electric power transmission-distribution coordination under uncertainty

A complementarity model for electric power transmission-distribution coordination under uncertainty

Equilibria in Interdependent Natural-gas and Electric Power Markets: an Analytical Approach

Risk Trading in Energy Communities

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