Searching for noncooperative equilibria in centralized electricity markets

The use of Nash equilibria as strategic bidding solutions for players competing in a centralized electricity market has been explored in the literature. In addition, the existence of multiple market equilibria, both in pure and in mixed strategies, when system constraints are taken into account in the market solution, has been shown for particular test cases. This paper addresses the difficult problem, due to its exponential order, of finding multiple equilibria in centralized electricity markets. A systematic procedure which allows the analysis of multimachine systems is employed. Moreover, some conclusions concerning the existence of multiple market equilibria in real networks are made possible by the method presented here. The paper carefully explains the models and market assumptions under discussion and details the algorithmic procedure for the search method. The IEEE 30-bus and 57-bus systems are used as test cases.