Dynamic Game Model for Deregulated Electricity Markets Considering the Ramp Rate Constraints

In this paper, we investigate how generators´ ramp rate constraints may influence generators´ equilibrium strategy formulation. In the market model, generators´ ramp rate constraints are explicitly represented. In order to fully characterize the inter-temporal nature of the ramp rate constraints, a dynamic game model is presented. The subgame perfect Nash equilibrium is adopted as the solution of the game and the backward induction procedure is designed. Due to the inter-temporal nature of the ramp rate constraints, the subgame perfect Nash equilibrium strategy should be a Markov strategy. This, in turn, suggests that the subgame perfect Nash equilibrium of the proposed game should be characterized as the Markov perfect equilibrium. Finally, two examples including a simple discrete strategy example and a numerical illustration of applying the proposed approach are presented.