A supply chain network perspective for electric power generation, supply, transmission, and consumption

In this paper, we develop a supply chain network perspective for electric power production, supply, transmission, and consumption. We consider 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. We derive the optimality conditions, define the equilibrium state for the electric power supply chain network, and derive the equivalent finite-dimensional variational inequality, whose solution yields the equilibrium electric power flows transacted between the tiers of the supply chain network as well as the nodal prices. We then utilize the variational inequality formulation to provide qualitative properties of the equilibrium electric power flow and price patterns and to propose a computational scheme, which is then applied to compute the solution to several numerical examples