Dynamics of non-collusive oligopolistic electricity markets

In this paper, a dynamic oligopolistic market model is proposed to analyze the new competitive electricity environment. The model is developed on the basis of the well-known Cournot model for the analysis of a noncollusive oligopolistic market and it is able to describe the behavior of such a type of electricity market, revealing how the behavior of suppliers affects each other´s profit maximization. In particular, reaction functions, isoprofit curves, and characteristic of suppliers sharing the market, are evaluated, considering the system´s total load demand that takes into account the presence of transmission losses, and calculated on the basis of each current generating schedule. Moreover, a particular time during the day is chosen and the dynamic behavior throughout the bidding process of the price of electricity for that particular market is investigated. The effectiveness of the proposed methodology is tested on the IEEE 30-bus system