Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model
In a deregulated market, energy can be exchanged like a commodity and the market agents including generators, distributors, and the end consumers can trade energy independently settling the price, volume, and the supply terms. Bilateral contracts (BCs) have been applied to hedge against price volati...
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doaj-3305de4e5f394902b47e2895b051ff4e2021-01-03T00:00:17ZengMDPI AGDesigns2411-96602021-01-0153310.3390/designs5010003Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract ModelReinaldo C. Garcia0Javier Contreras1Bárbara Caldeira Macedo2Daniel da Silva Monteiro3Matheus L. Barbosa4Industrial Engineering Department, University of Brasilia, Brasilia 70910-900, BrazilE.T.S. de Ingeniería Industrial, University of Castilla—La Mancha, 13071 Ciudad Real, SpainFaculty of Mathematics and Statistics, Polytechnic University of Catalonia, 08028 Barcelona, SpainSales Trader, BTG Pactual Bank, São Paulo 04538-133, BrazilSchool of Computing and Information, University of Pittsburgh, Pittsburgh, PA 15260, USAIn a deregulated market, energy can be exchanged like a commodity and the market agents including generators, distributors, and the end consumers can trade energy independently settling the price, volume, and the supply terms. Bilateral contracts (BCs) have been applied to hedge against price volatility in the electricity spot market. This work introduces a model to find all solutions for the equilibria implementing the Raiffa–Kalai–Smorodinski (RKS) and the Nash Bargaining Solution (NBS) approaches in an electricity market based on BCs. It is based on creating “holes” around an existing equilibrium within the feasibility set, yielding a new (smaller) feasibility set at each iteration. This research has two players: a generation company (GC) and an electricity supplier company (ESC), aiming to achieve the highest profit for each of them. The results present all possible RKS and NBS, in addition to showing all assigned energies for a case study at different time frames. The multiple equilibria solutions allow the ESC and the GC to apply different strategies knowing that they can still achieve an optimal solution.https://www.mdpi.com/2411-9660/5/1/3electricity marketmultiple equilibriabilateral contractsRaiffa–Kalai–Smorodinsky bargaining solutionNash bargaining solution |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Reinaldo C. Garcia Javier Contreras Bárbara Caldeira Macedo Daniel da Silva Monteiro Matheus L. Barbosa |
spellingShingle |
Reinaldo C. Garcia Javier Contreras Bárbara Caldeira Macedo Daniel da Silva Monteiro Matheus L. Barbosa Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model Designs electricity market multiple equilibria bilateral contracts Raiffa–Kalai–Smorodinsky bargaining solution Nash bargaining solution |
author_facet |
Reinaldo C. Garcia Javier Contreras Bárbara Caldeira Macedo Daniel da Silva Monteiro Matheus L. Barbosa |
author_sort |
Reinaldo C. Garcia |
title |
Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model |
title_short |
Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model |
title_full |
Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model |
title_fullStr |
Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model |
title_full_unstemmed |
Finding Multiple Equilibria for Raiffa–Kalai–Smorodinsky and Nash Bargaining Equilibria in Electricity Markets: A Bilateral Contract Model |
title_sort |
finding multiple equilibria for raiffa–kalai–smorodinsky and nash bargaining equilibria in electricity markets: a bilateral contract model |
publisher |
MDPI AG |
series |
Designs |
issn |
2411-9660 |
publishDate |
2021-01-01 |
description |
In a deregulated market, energy can be exchanged like a commodity and the market agents including generators, distributors, and the end consumers can trade energy independently settling the price, volume, and the supply terms. Bilateral contracts (BCs) have been applied to hedge against price volatility in the electricity spot market. This work introduces a model to find all solutions for the equilibria implementing the Raiffa–Kalai–Smorodinski (RKS) and the Nash Bargaining Solution (NBS) approaches in an electricity market based on BCs. It is based on creating “holes” around an existing equilibrium within the feasibility set, yielding a new (smaller) feasibility set at each iteration. This research has two players: a generation company (GC) and an electricity supplier company (ESC), aiming to achieve the highest profit for each of them. The results present all possible RKS and NBS, in addition to showing all assigned energies for a case study at different time frames. The multiple equilibria solutions allow the ESC and the GC to apply different strategies knowing that they can still achieve an optimal solution. |
topic |
electricity market multiple equilibria bilateral contracts Raiffa–Kalai–Smorodinsky bargaining solution Nash bargaining solution |
url |
https://www.mdpi.com/2411-9660/5/1/3 |
work_keys_str_mv |
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