Independent operation by subsystems: Strategic behavior for the Brazilian electricity sector

This article describes the competitive strategies of the subsystems in the Brazilian electricity sector. The objective is to present a model in which the operation of each subsystem is managed independently. As the subsystems correspond to the country's geographic regions, the adoption of this model creates conditions for each region to develop according to its own peculiarities. The decision-making process is described based Game Theory. As such, the players or operators of each subsystem carry out their strategies based on the quantities produced, which results in Nash–Cournot equilibrium. In this model, the importance of the proper transmission line dimensioning is highlighted. It determines the competition level among subsystems and allows for optimization of the whole system without requiring arrangements for managing the congestion of the energy transportation grid. The model was programmed in FORTRAN, using IBM's optimization subroutine library (OSL) package.