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This paper analyzes numerically the approach reported in the companion paper for identifying generation investment equilibria in an electricity market where the producers behave strategically. To this end, a two-node illustrative example and a large-scale case study based on the IEEE reliability test system (RTS) are examined and the results obtained are reported and discussed. [ABSTRACT FROM PUBLISHER]

The first of this two-paper series proposes a methodology to characterize generation investment equilibria in a pool-based network-constrained electricity market, where the producers behave strategically. To this end, the investment problem of each strategic producer is represented using a bilevel model, whose upper-level problem determines the optimal investment and the supply offering curves to maximize its profit, and whose several lower-level problems represent different market clearing scenarios. This model is transformed into a mathematical program with equilibrium constraint (MPEC) through replacing the lower-level problems by their optimality conditions. The joint consideration of all producer MPECs, one per producer, constitutes an equilibrium problem with equilibrium constraints (EPEC). To identify the solutions of this EPEC, each MPEC problem is replaced by its Karush-Kuhn-Tucker (KKT) conditions, which are in turn linearized. The resulting mixed-integer linear system of equalities and inequalities allows determining the EPEC equilibria through an auxiliary MILP problem. [ABSTRACT FROM PUBLISHER]

We address the generation investment problem faced by a strategic power producer and consider a detailed description of the uncertain parameters involved, namely, rival producer investment and market offering, and demand growth. To identify optimal investment decisions, we consider a target year and propose a bilevel model whose upper-level problem determines investment and offering decisions to maximize expected profit, and whose many lower-level problems represent market clearing conditions per demand block and scenario. Since the producer total expected profit is sufficiently convex with respect to investment decisions, a Benders' decomposition approach is proposed that results in a tractable formulation even if hundred of scenarios are used to describe uncertain parameters. Extensive numerical simulations based on realistic case studies show the good performance of the proposed decomposition approach. [ABSTRACT FROM PUBLISHER]

This paper provides a methodology to assist a strategic producer in making informed decisions on generation investment. A single target year is considered with demand variations modeled through blocks. The strategic behavior of the producer is represented through a bilevel model: the upper-level considers both investment decisions and strategic production actions and the lower-level corresponds to market clearing. Prices are obtained as dual variables of power balance equations. Rival uncertainties (on offering and investment) are characterized through scenarios. The resulting model is a large-scale mixed-integer LP problem solvable using currently available branch-and-cut techniques. Results pertaining to an illustrative example and a case study are reported and discussed. [ABSTRACT FROM PUBLISHER]