A decomposition approach to multi-region optimal power flow in electricity networks

We present a decomposition approach to a class of social welfare optimization problems for optimal power flow in multi-region electricity networks. The electricity network is decomposed into multiple regions which decide independently over the amount of power produced within the region and exchanged with neighboring regions. We decompose the overall power flow (or social welfare) optimization into region-based optimization problems (namely, power flow game), which is based on the introduction of dual variables representing nodal and link prices. Due to the interdependencies between regions´ utilities, the social welfare maximizer might not necessarily correspond to a Nash equilibrium of the power flow game. We derive conditions under which the social welfare maximizer is a Nash equilibrium of the game, and investigate uniqueness of Nash equilibria. Finally, we examine whether convergence to the social welfare maximizer may occur under natural best-response dynamics.