ISSN: 2226-3624
Open access
Restructuring of electricity market in Iran has been accepted and operationalized following the power market in industrial countries. Increasing of efficiency through insertion of economic considerations and transition from monopoly to more competitive conditions in order to become closer to the optimal status are the basis to accept restructuring. Given to the market structure, imperfect competition is ultimately fulfilled in this market that games theory solutions should be used to analyze it. On the other side, given to bidding and pay-as-bid (PAB) in Iran's electricity market, supply function equilibrium (SFE) models is suitable for analysis. Therefore, having proposed function and the suitable theoretical model and estimated marginal cost function and uncertainty demand parameters, in the framework of SFE approach, the optimal supply function equilibrium of one of the firms of the electricity market in Isfahan was extracted by means of MATLAB software. Then it was compared with the proposed supply function. The obtained results revealed that the current proposed supply function does not conform to the theoretical optimal supply function in Nash equilibrium.
Anderson, E. J. and Philpott, A. B.(2002). Using supply functions for offering generation into an electricity market. Operation Research, Vol.50, pp.477-496.
Anderson, E. J. and Xu, H.(2002). Necessary and sufficient condition for optimal offers in electricity market. SIAM Journal on Control and Optimization, Vol.41, pp.1212-1228.
Dehesh, M.H. (2010). Supply function equilibrium in electricity market: Theory of games approach (Master's thesis, Department of Administrative Sciences and Economics, University of Isfahan, Isfahan
Federico,G. and Rahman, D. (2003).Bidding in an electricity pay-as-bid auction. Journal of Regulatory Economics, Vol.24, No. 2, pp.175-211.
Garcia, A. and Arbeláez, L.E. (2002).Market power analysis for the Colombian electricity market. Energy Economics,Vol. 24, pp.217-229.
Holmerg, P. (2008).Uniqe supply function equilibrium with capacity constraint. Energy Economics, Vol.30,pp.148-172.
Holmberg, P. (2009). Supply function equilibria of pay-as-bid auctions. Journal of Regulatory Economics, Vol.36, pp.154-177.
Klemperer, P. and Meyer, M. (1986). Price competition vs. quantity competition: the role of uncertainty. Rand Journal Economics, Vol.17, No.4, pp. 618-638.
Klemperer, P. and Meyer, M. (1989). Supply function equilibria in oligopoly under uncertainty. Econometrica, Vol. 57, No.6, pp.243-270.
Khoshakhlagh, R et al. (2012). Determining the basis of equations in the momentary electricity market. Case study of Isfahan electricity market. Journal of Economic Studies, Vol.46, pp. 65-87
Nazemi Ashni, A. (2012). Analysis of market power in Iran's electricity market, PhD thesis, Department of Administrative Sciences and Economics, University of Isfahan, Isfahan
Niu, H.(2005). Supply function equilibrium bidding strategies with fixed forward contracts. IEEE Transaction on Power System, Vol.20, No.4, pp.1859-1867.
Shweppe, F. (1988). Spot Pricing of Electricity. Boston, Kluwer Academic Publisher.
Sioshansi, R. andOren, Shmuel S. (2007). How good are supply function equilibrium models: an empirical analysis of the ERCOT balancing market. Journal of Regulatory Economics, Vol.31, pp.1-35.
Stoft, s. (2003). Power System Economics.New York City: IEEE Press.
Tirole, J. and Fudenberg, D. (1995).Game Theory. Cambridge, Massachusetts:MIT Press.
(Moeeni et al., 2013)
Moeeni, S., Sharifi, A., Khoshakhlagh, R., & Azarbayjani, K. (2013). Analysis of the Restructured Energy Market in the Framework of Game Theory: Iran’s Power Industry. International Journal of Academic Research in Economics and Management Sciences, 2(5), 84–97.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode