A mathematical model of managing a regulated monopoly district heating market

This paper formulates an approach to managing the district heating of consumers in a hierarchical two-level system. The upper level is a regulator (e.g., a regional tariff service) that adjusts the heat energy tariff for consumers. The lower level is a district heating system that technologically and organizationally combines heat energy production and transport within a unified heat supply organization. The interaction of all participants in the process of heat supply to consumers is described. Optimization criteria are proposed for the upper and lower levels. A bi-level mathematical model of the district heating system is developed using the theory of hydraulic circuits and bi-level programming. This model operates in the conditions of a regulated monopoly heat energy market. The developed approach is applied to the real district heating system of Angarsk.