Market Equilibrium Under Incomplete and Imperfect Information in Bilateral Electricity Markets

In contrast to the centralized pool model, bilateral markets present a decision-making situation in which information plays a major role along with the physical and operative constraints of the network. We propose a model that includes network constraints for competitive bilateral electricity markets based on an evolutionary bipartite complex network in which the nodes and weighted links represent the players and transactions, respectively. The strong stable equilibrium of the network is applied to detect possible market equilibria obtained through a dynamic game, with incomplete and imperfect information, in which the players form an evolutionary network while trying to maximize their own utilities. The model is conceptually illustrated with a four-bus test system and then applied to the IEEE30 test system to analyze the impact of the transmission network and information on the equilibria and market performance.