Joint energy and capacity equilibrium for centralized and distributed generation

This paper presents a conjectured-price-response equilibrium approach for modeling centralized and distributed generation (CG and DG respectively). The Nash game is set up with two constraints linking the CG and DG decisions to satisfy both the electricity demand in an energy market, and the demand peak in a capacity market. CG companies and DG customers
simultaneously decide both hourly productions and annual installed capacities, where the CG agents maximize their markets profits and the DG customers minimize their costs (considering tariffs with energy, power and capacity payments terms). The equilibrium conditions can represent different degrees of oligopoly in both the energy and capacity markets and can be solved by an equivalent quadratic minimization problem. Several case examples show ...