Nash Commitment for Energy Trading in Liberalized Power Market: a State of Art Review

With the leading reforms in power sector from regulation to liberalization, monopoly has been transformed to challenging market places of competitive electrical power participants. The manifesto reforms include highly governed power transmission utility, effective price prediction with efficient cost of production and mitigation of long term monopoly of industrial relationship. Liberalized power market includes Independent Power Producer (IPP), aiming at maximizing the market profit and Independent System Operator (ISO), ensuring common welfare with guaranteed system stability, market operator (MO) providing platform for physical and financial power trading to participants and many new entities such as franchise, retailer etc. With the notion that power generating players play “Power Game” by knowing the strategies of other competitors for refining the bid strategy, the theory of Nash Commitment is applied to the electricity market for proper energy trading both at suppliers end and consumers end. This paper investigates and represents the work done so far in the field of electrical power trading using Nash game theory.