Dynamics of Electric Power Supply Chain Networks under Risk and Uncertainty

Over the past several decades, the electric power industry in the US and in several other countries has been undergoing a fundamental transformation due to deregulation. This transformation has been accompanied by an increase in the number of market participants and changes to the electricity flow patterns with system reliability being increasingly difficult to maintain. The occurrence of several major power outages in 2003 in the US, Canada, England, Switzerland, and Italy suggest that recent changes in the electric power markets require renewed and intense scrutiny. Towards that end, in this paper, we develop a dynamic model for electric power generation, supply, transmission, and consumption under risk and demand uncertainty. We consider the behavior of the various multicriteria decision-makers, who operate in a decentralized manner and include power generators, power suppliers, transmission service providers, as well as the consumers associated with the demand markets. We derive a projected dynamical system that describes the behavior of the entire system; introduce the speeds of adjustment for the adjustment processes associated with the electric power transactions and the prices and prove that the equilibrium solution does not change with a change in the adjustment speed(s). We also propose a computational procedure that discretizes and tracks the continuous-time trajectories, and provide several illustrative numerical examples, accompanied by graphs of the iterates over time.