Mathematical modeling and simulation of the impact of system´s constraints on IPP´s bidding strategies

We investigate the impact of systems´ constraints (generation and transmission) and of demand elasticity on independent power producers´ (IPPs) market strategies. An analytical model, which is an extended Cournot model derived from the classical Cournot model, has been developed. Simulation results obtained with the authors´ extended Cournot model are compared with results obtained with an industrial-grade software package (Plexos) are compared and analyzed. The simulation results show that, with the consideration of systems´ constraints, some of the IPPs could obtain higher profits through capacity withholding.