Market equilibrium in natural gas systems : analysis of theiImplementation of a hub
Resumen
The introduction of competition in the natural gas market, increases the interaction
among shippers, changing the scenario they have to face and therefore their behavior.
Gas demand is expected to be more flexible, mainly because of the use of natural gas
fired power plants (NGGFPPs) to back up intermittent generation. Conversely, most of
the contracts are long-term contracts, which are not suitable for this flexible demand
scenario and oblige shippers to balance their position in the OTC market. With the
introduction of hubs, transactions costs are reduced and additional flexibility is achieved.
The general objective of this master thesis is to represent the strategic behavior of
agents in a market environment, in which they will try to maximize their profit. Each agent
maximizes its profit facing a captive demand where it behaves as a monopoly, and
interacting with the rest of the agents in the hub, in the electricity market and in foreign
markets, holding different market behaviors. The equilibrium is stated as a Mixed
Complementarity Problem and the three methodologies which are used for solving the
problem are described.
Finally, in order to overcome the limitations of the Mixed Complementary Problem (MCP)
formulation, an iterative optimization problem is proposed.