Impacts of Large-Scale Integration of Intermittent Resources on Electricity Markets: A Supply Function Equilibrium Approach

In this paper, the impact of large-scale integration of intermittent generation resources on electricity markets is studied through a supply function equilibrium model. A new formulation for determining supply function equilibria in uniform electricity markets is presented, where uncertainty of intermittent generation resources is taken into account. In the case of an unconstrained market model where generation limits are ignored, a closed form solution for market equilibrium is derived and its uniqueness is proved. In the case of a generation-constrained market model, an algorithm is proposed for determining supply function equilibria and the existence and uniqueness of the equilibrium is discussed. Case studies are presented for demonstrating the proposed approaches.