Section: New Results

New Price Setting models in the Energy Field

Participant : L. Brotcorne.

The electricity supply industry is facing in many countries a restructuring process towards deregulation and competition. In that context classical marginal cost based approaches based on estimation of cost production function and demand functions are not well-suited anymore. Indeed, the energy prices have to be defined not only to retrieve the production costs but also in order to take into account the consumer behavior. Consumers make their choice of service, or of energy provider in order to minimize their disutility values. Failing to recognize that may lead to tremendous lack on revenues. In order to capture this hierarchical decision process where a leader (the energy provider) takes explicitly into account the reaction of a follower (the consumers) in his decision process (see for example [1]) the energy pricing problems addressed in this subject have been modeled as bilevel programs.