Joint energy and spinning reserve dispatch under imperfect competition

This study analyzes the strategic interaction among suppliers in an oligopolistic market where electrical energy and spinning reserve are simultaneously traded. Suppliers´ strategic behavior is represented via a parameterized Supply Function Equilibria (SFE) model. Supply curves for energy and spinning reserve services are parameterized using a two-degree-of-freedom parameterization involving arbitrarily manipulation of the slope and the intercept. A two-level optimization technique with equilibrium constraints is employed for deriving Nash strategies under pay-as-bid pricing (PABP) and marginal pricing (MP) mechanisms. A multiperiod market based on a six-bus test system is used to illustrate the method and to analyze the interaction between the energy and spinning reserve markets. The extension to a multigenerator game is discussed through numerical results.