Heuristic search algorithms to detect collusive opportunities in deregulated electricity markets

Official URL: https://risc01.sabanciuniv.edu/record=b2486369 _ (Table of contents)

In deregulated electricity markets, the main objective is to maintain a competitive trading environment and satisfy demand at lowest possible cost. However, sustaining a competitive environment is challenging and collusion among the Power Generation Companies (GenCos) might exist. Therefore, the Independent System Operator (ISO) controls the auction mechanism as a decision-maker for the electricity distribution. In order to guide the ISO to detect collusion, we develop a search algorithm and its variations by using the bi-level programming problem in Aliabadi, Kaya & Sahin (2016). We create 26 instances of 3 different problem sizes to test the performance of the algorithms. We compare the results of the algorithms to the total enumeration algorithm, which is an exact method to detect collusion but may not be executed in reasonable time, and among themselves. Moreover, we experiment with the algorithms using alternative single-level formulations of the bi-level programming problem