Analysis of Market Power Using an AC Transmission System

Using an AC transmission network, oligopolistic competition in power markets is formulated as a nonlinear programming (NLP) problem, and characterized by a multi-leader single-follower game. The follower is composed of a set of competitive suppliers, demands and the system operator, while the leaders are the dominant suppliers. An AC network is modelled using rectangular coordinates. This approach allows one to capture the strategic behavior of suppliers regarding not only active but also reactive power. With this setting, the voltage and apparent power flow constraints can be easily explored. Based on a three-node system, an illustrative study case is used to highlight the features of the formulation