  We study an energy market composed of producers who compete to supply energy
to different markets and want to maximize their profits. The energy market is
modeled by a graph representing a constrained power network where nodes
represent the markets and links are the physical lines with a finite capacity
connecting them. Producers play a networked Cournot game on such a network
together with a centralized authority, called market maker, that facilitates
the trade between geographically separate markets via the constrained power
network and aims to maximize a certain welfare function. We first prove a
general result that links the optimal action of the market maker with the
capacity constraint enforced on the power network. Under mild assumptions, we
study the existence and uniqueness of Nash equilibria and exploit our general
result to prove a connection between capacity bottlenecks in the power network
and the emergence of price differences between different markets that are
separated by saturated lines, a phenomenon that is often observed in real power
networks.
