A contract network extends the concept of a contract path to address the problem of loop flow and congestion in electric power transmission systems. A contract network option provides an internally consistent framework for assigning long-term capacity rights to a complicated electric transmission network. The contract network respects the special conditions induced by Kirchoff's Laws; accommodates thermal, voltage, and contingency constraints on transmission capacity; and can be adopted without disturbing existing methods for achieving an economic power dispatch subject to these constraints. By design, a contract network would maintain short-run efficiency through optimal spot-price determination of transmission prices. Through payment of congestion rentals, the contract network makes a long-term capacity-right holder indifferent between delivery of the power or receipt of payments in a settlement system. to]Everybody talks about the weather, but nobody does anything about it.

Contract Networks for Electric Power Transmission

Transmission constraints and market concentration may prevent power markets from being fully competitive, allowing firms to exercise market power and raise prices above marginal cost. We present a strategic gaming model for analyzing such markets; it represents an oligopolistic market economy consisting of several dominant firms in an electric power network. Each generating firm submits bids to an ISO, choosing its bids to maximize profits subject to anticipated reactions by rival firms. The single-firm model is formulated as a mathematical program with equilibrium constraints (MPEC) with a parameter-dependent spatial price equilibrium problem as the inner problem. Power flows and pricing strategies are constrained by the ISO's linearized DC optimal power flow (OFF) model. A penalty interior point algorithm is used to compute a local optimal solution of the MPEC. Numerical examples based on a 30 bus network are presented, including multi-firm Nash equilibria in which each player solves an MPEC of the single-firm type.

Strategic gaming analysis for electric power systems: an MPEC approach

This tutorial paper discusses some aspects of electricity markets from the perspective of the demand-side. It argues that increasing the short-run price elasticity of the demand for electrical energy would improve the operation of these markets. It shows, however, that enhancing this elasticity is not an easy task. The tools that consumers and retailers of electrical energy need to participate more actively and effectively in electricity markets are discussed. The paper also describes how consumers of electricity can take part in the provision of power system security.

Demand-side view of electricity markets

In this paper, we examine the research and results of dynamic pricing policies and their relation to revenue management. The survey is based on a generic revenue management problem in which a perishable and nonrenewable set of resources satisfy stochastic price sensitive demand processes over a finite period of time. In this class of problems, the owner (or the seller) of these resources uses them to produce and offer a menu of final products to the end customers. Within this context, we formulate the stochastic control problem of capacity that the seller faces: How to dynamically set the menu and the quantity of products and their corresponding prices to maximize the total revenue over the selling horizon.

https://pages.stern.nyu.edu/~rcaldent/papers/Abstract-Survey-Paper-MSOM.pdf

Commissioned Paper: An Overview of Pricing Models for Revenue Management

Demand response modeling considering Interruptible/Curtailable loads and capacity market programs

Note: Bibliogr. : p. 255-266. Index Reference Record created on 2004-09-07, modified on 2016-08-08

Fred C. Schweppe

Papers

Spot Pricing of Electricity