Spatial oligopolistic electricity models with cournot generators and regulated transmission prices

An oligopoly with spatially dispersed generators and consumers and with mul ti-period demand is modeled in this paper. The producers are assumed to beh ave in a Cournot manner with regulated transmission prices. A (generalized) Nash equilibrium is sought. The story of the game is as follows. Each gene rator lakes its rivals' output (generation, supply, and flows) and the pric es for transmission services as fixed when it decides upon its output to ma ximize its profit; the transmission firm takes the quantities of transmissi on services demanded by the generators as fixed when it determines the tran smission prices according to certain regulatory rules. An equilibrium of th e model is a set of generation output at which no generator will obtain mor e profit if it unilaterally modifies its output from this set, and a set of transmission prices satisfying certain regulatory requirements. A variatio nal inequality approach is used for computing the equilibria of the model. Using the same approach, two variants of the model, respectively based on a verage;cost and marginal-cost pricing for transmission services, are also f ormulated. This model is applied to simulate a long-run electricity market where transmission prices are regulated.