Restructuring of electricity market in Iran has been accepted and operationalized following the power market in industrial countries. Increasing of efficiency through insertion of economic considerations and transition from monopoly to more competitive conditions in order to become closer to the optimal status are the basis to accept restructuring. Given to the market structure, imperfect competition is ultimately fulfilled in this market that games theory solutions should be used to analyze it. On the other side, given to bidding and pay-as-bid (PAB) in Iran's electricity market, supply function equilibrium (SFE) models is suitable for analysis. Therefore, having proposed function and the suitable theoretical model and estimated marginal cost function and uncertainty demand parameters, in the framework of SFE approach, the optimal supply function equilibrium of one of the firms of the electricity market in Isfahan was extracted by means of MATLAB software. Then it was compared with the proposed supply function. The obtained results revealed that the current proposed supply function does not conform to the theoretical optimal supply function in Nash equilibrium.
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