We consider the setting in which generators compete in scalar-parameterized supply functions to serve an inelastic demand spread throughout a transmission constrained power network. The market clears according to a locational marginal pricing mechanism, in which the independent system operator (ISO) determines the generators' production quantities so as to minimize the revealed cost of meeting demand, subject to transmission and generator capacity constraints. Under the assumption that both the ISO and generators choose their strategies simultaneously, we establish the existence of Nash equilibria for the underlying game, and derive a tight bound on its price of anarchy. Under the more restrictive setting of a two-node power network, we present a detailed comparison of market outcomes predicted by the simultaneous-move formulation of the game against those predicted by the more plausible sequential-move formulation, where the ISO observes the generators' strategy profile prior to determining their production quantities.
Weixuan Lin is a Ph.D. student in the School of Electrical and Computer Engineering at Cornell University. His current research examines the control and economics of modern power systems, with an emphasis on the design and analysis of electricity markets, and the optimal control of distributed energy resources. He received his B.S. from the Department of Electrical Engineering, Tsinghua University in 2013. He is a recipient of the Student Travel Grant for IEEE SmartGridComm 2016, the Outstanding Graduate Honor from Tsinghua University, the Hewlett Packard Fellowship, and the Jacobs Scholar Fellowship.