Improved Transmission Representations in Oligopolistic Market Models

Practical models of competition among power generators who possess market power have had to use simplified models of transmission costs and constraints in order to be tractable. In particular, the linearized DC load flow model has been popular in complementarity and other types of models. In this paper, we show how such models can be generalized to include quadratic losses, controllable DC lines, and phase shifting transformers. These generalizations preserve convexity of the feasible region, a property that facilitates computation and proof of solution uniqueness and existence. Piecewise and successive linearization formulations are all also provided that allow consideration of nonlinear losses in models that require linear constraints. A simple six node example illustrates the application of these generalizations. Large-scale applications of these approaches to markets in PJM, the European Union, and the WSCC will be summarized in the presentation