Strategic gaming in electric power markets

This paper presents an overview of strategic gaming used for understanding the effective company and regulatory strategies for various market participants under alternative scenarios on pricing and institutional structures for electric power. Utilizing the England and Wales (E&W) power pool as a testbed, we develop an aggregate model of payoffs for various stakeholders, under specified demand and supply scenarios, with strategic moves by these stakeholders as the key input to be evaluated. The use of this type of model in a strategic gaming setting is then examined, together with a discussion of experience in using this approach in evaluating a particular decision problem regarding network investment strategies in the E&W power market.