Considering transmission constraints for analysis on bidding strategies of power market based on nash equilibrium

To accurately simulate the dynamic decisionmaking of market participants, this paper presents a dynamic bidding model of power markets considering power network transmission constraints based on the supply function and Nash equilibrium theory. The new model is composed of a differential dynamic system and semi-smooth equations system which are reformulated by nonlinear complementarity problem (NCP). The bidding variable is considered as the linear and quadratic coefficients of the supply function. Based on this model, as an example with six lines and five buses, the Nash equilibrium was analyzed in different market parameters and different operational conditions of transmission network: non-congestion and congestion; by using the numerical simulation approach, the effect of different market parameters to the dynamic behaviors was discussed; and the results were compared with the Cournot model. The simulating results show that the new model is valid.