A MPCC-NLP approach for an electric power market problem

• Author(s): Rodrigues, Helena Sofia ; Monteiro, M. Teresa T. ; Vaz, A. Ismael F.
• Date: 2010
• Persistent ID: http://hdl.handle.net/1822/10842
• Origin: RepositóriUM - Universidade do Minho
• Subject(s): Electric power; Stackelberg game; Nonlinear Programming; Complementarity constrained problem
• Document Type: Article
• Language: English

Description

The electric power market is changing - it has passed from a regulated market, where the government of each country had the control of prices, to a deregulated market economy. Each company competes in order to get more clients and maximize its profits. This market is represented by a Stackelberg game with two firms, leader and follower, and the leader anticipates the reaction of the follower. The problem is formulated as a Mathematical Program with Complementarity Constraints (MPCC). It is shown that the constraint qualifications usually assumed to prove convergence of standard algorithms fail to hold for MPCC. To circumvent this, a reformulation for a nonlinear problem (NLP) is proposed. Numerical tests using the NEOS server platform are presented.