Cournot equilibrium analysis for forward and spot gaming in electricity markets with loop flow constraints

Loop flow constraints are the important peculiarities of electric power systems, and it is practically meaningful to analyze the impact of loop flow constraints on electricity market equilibrium and producerspsila strategic forward contracting. A joint Cournot equilibrium model for strategic forward contracting and spot market competition is proposed taking loop flow constraints into account. This model can be reformulated as an equilibrium problem with equilibrium constraints and be solved by a nonlinear complementarity method. A numerical example is presented to verify the effectiveness of the proposed model and solution method. The results show that loop flow constraints are more relevant to electricity market equilibrium and generatorspsila strategic forward contracting. If neglecting loop flow constraints, error price signals and unreasonable results may be derived.