Pricing and system operation in multi-regional electricity market based on noncooperative game

Electricity markets are experiencing widespread changes that are significantly altering the industry. In this paper, economic load dispatching rules in power systems under a competitive environment are investigated when independent power producers (IPPs) are introduced and analyze the two-level game strategies for the negotiation process between utilities, IPPs and customers. These have been previously recognized as a way to come up with a rational decision for competitive markets, in which players intend to maximize their own profits. The derived operation rules based on competition can be viewed as an extension of the conventional equal incremental cost method for the power system. The proposed approach is applied to several systems to verify its effectiveness