A Supply Chain Network Perspective for Electric Power Generation, Supply, Transmission, and Consumption

Abstract: A supply chain network perspective for electric power production, supply, transmission, and consumption is developed. The model is sufficiently general to handle the behavior of the various decision-makers, who operate in a decentralized manner and include power generators, power suppliers, the transmitters, as well as the consumers associated with the demand markets. The optimality conditions are derived, along with the equilibrium state for the electric power supply chain network. The finite-dimensional variational inequality formulation of the equilibrium state is derived, whose solution yields the equilibrium electric power flows transacted between the tiers of the supply chain network as well as the nodal prices. The variational inequality formulation is utilized to provide qualitative properties of the equilibrium electric power flow and price patterns and to propose a computational scheme. The algorithm is then applied to compute the solutions to several numerical examples.