A two stage stochastic equilibrium model for electricity markets with forward contracts

This paper investigates a two stage equilibrium model for generators´ strategic behaviors in contract signing in the forward market and electricity bidding in the electricity spot market. We propose a linear asymmetric supply function equilibrium model to develop generators´ optimal bidding strategies considering a forward market equilibrium in the second stage, and show the existence and uniqueness of the two stage stochastic equilibrium. In the numerical test, we present some stability analysis on the impacts of a set of factors on the market clearing price in the spot market and strike price in the forward market.