Summary:
In liberalized markets, agents are expected to maximize their profits. Such behavior does not require additional considerations if it occurs in an environment of perfect competition. However, there may be dominant players in markets where the number of participating agents is small, as in the electricity market. Specific regulations are implemented to limit possible strategic behaviors, which the Generation Companies (GenCos) must consider when planning their operation. If such behaviors were allowed in models, their utility as planning tools would be lost as their results would deviate from expected market outcomes where compliance with regulation is needed. In this paper, we propose the additional constraints that should be applied to the income of individual generation units in a profit maximization model.
The mathematical formulation is detailed, and a case study is presented to show the advantages of the proposed model.
Spanish layman's summary:
El paper presenta una formulación de self-UC de maximización de beneficio que considera las restricciones regulatorias destinadas a limitar el comportamiento estratégico. Además presenta un caso ejemplo para comprobar su utilidad
English layman's summary:
The paper presents a self-UC formulation for profit maximization that considers regulatory constraints aimed at limiting strategic behavior. In addition, it shows an example case to test its usefulness.
Keywords: unit commitment, profit maximization, strategic behavior, regulatory constraints
Registration date: 06/07/2022
IIT-22-122WP
