A conjectural supply function equilibrium in energy and reserve for a weekly horizon

Despite the fact that reserves still have a small impact on the final electricity price, the rapid irruption of renewable and interruptible technologies has put in the spotlight the value of these services. It seems therefore important to rely on market models able to output realistic energy and reserve prices under imperfect competition. However, few are the authors that have modeled strategic behavior in both commodities. This paper presents an hourly multi-period oligopolistic model for energy and reserve markets, with units commitment decisions and hydro-coordination, based on the conjectural supply function equilibrium. Its outputs have been compared with real Spanish data from the first weeks of 2011 with satisfactory results.