Effects of Interruptible Load Program on Equilibrium Outcomes of Electricity Markets with Wind Power - Intelligent Computing for Sustainable Energy and Environment - page 411

Due to the fact that the emerging electricity wholesale markets are more akin
to oligopolistic markets than perfect competitive markets, generators have the
ability to manipulate the market price by the strategic behaviors, which has
a serious impact on eciency and reliability of electricity markets. Therefore,
analysis of generators strategic behaviors and market power using oligopolistic
equilibrium models has become one of hot topics in electricity market fields
[7]-[8]. To date, most of the related research works are based on the Cournot
equilibrium model [9]-[11] and the supply function equilibrium (SFE) model
[12]-[13].
It can be noted that up to now, there is few research work to address the
impacts of the IL contracts on generators strategic behaviors and the equilibrium
outcomes in the wholesale market with wind power. Given this background, this
paper commits to address the above mentioned problem.

2 Theoretical Model

2.1 Demand Model with IL Contract

For electricity wholesale markets without IL contracts, the market demand D
at a future time period t (1h) is generally be expressed by the following linear
demand curve:

D ( p )= A − bp (1)

where, p is the market price at time t ; A and b are non-negative coecients. b
is a parameter to describe the magnitude of demand elasticity, a relatively large
value of b indicates a relatively high demand elasticity. This demand curve can
be shown by line segment 1 and 2 in Fig.1.
Consider that there is an IL contract in the wholesale market which can be
exercised at time t .Let Q and k 0 denote the IL contract volume and the trigger
price, respectively. When the market price p is higher than k 0 , the customers
that take part in the IL contract will be curtailed a load demand of Q , and will
be paid a certain amount of economic compensation.
The market demand for the wholesale market with the IL contract can be
derived as follows. For market prices below k 0 , because the IL contract will
not be exercised, the market demand will not be affected by the IL contract,
which can be illustrated as line segment 1 in Fig. 1. For market prices greater
than k 0 , because the IL contract will be exercised, the market demand will
be lowered by Q , which can be illustrated as line segment 4 in Fig. 1. From
Fig. 1, it can be found that, when the market price p is equal to k 0 , either
the whole IL contract volume Q is curtailed or no load demand is interrupted,
will give rise to non-smoothness in the demand curve at the point of k 0 .This
non-smoothness in the demand curve may lead to inexistence of the market
equilibrium state. To deal with this problem, we suppose that when p = k 0 ,the
IL contract can be partially exercised. That is, when p = k 0 , an endogenous
volume V is applied for interruption decision of the IL contract, which satisfies