Applications of Bilevel Optimization in Energy and Electricity Markets

Sonja Wogrin*, Salvador Pineda, Diego A. Tejada-Arango

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Ever since the beginning of the liberalization process of the energy sector and the arrival of electricity markets, decision making has gone away from centralized planners and has become the responsibility of many different entities such as market operators, private generation companies, transmission system operators and many more. The interaction and sequence in which these entities make decisions in liberalized market frameworks have led to a renaissance of Stackelberg-type games referred to as bilevel problems, which capture the natural hierarchy in many decision-making processes in power systems. This chapter aims at demonstrating the crucial insights that such models can provide, and at providing a broad overview of the plethora of the applications of bilevel programming in energy and electricity markets. Finally, a numerical example is included for illustrative purposes.

Original languageEnglish
Title of host publicationSpringer Optimization and Its Applications
PublisherSpringer
Pages139-168
Number of pages30
DOIs
Publication statusPublished - 2020
Externally publishedYes

Publication series

NameSpringer Optimization and Its Applications
Volume161
ISSN (Print)1931-6828
ISSN (Electronic)1931-6836

Keywords

  • Electricity markets
  • Energy applications
  • Energy storage systems
  • Generation expansion planning
  • Strategic bidding
  • Transmission expansion planning

ASJC Scopus subject areas

  • Control and Optimization

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