Market power assessment in electricity markets: supply function equilibrium-based model

摘要

Because of the oligopoly structure of the electricity markets, the Generation Companies (GenCos) may exertnmarket power by using bidding strategies such as capacity withholding. This brings the market clearingnprice higher and the quantity generated of the market lower. In this article, capacity withholding in annoligopolistic electricity market in that all GenCos bid in the supply function equilibrium model is analyzednand the capacity withheld index, the capacity distortion index and the price distortion index are formulated.nDemand elasticity and forward contracts can significantly affect the GenCos’ capacity withholding in thenmarket. The potential ability of market for capacity withholding is measured by the distortion–withheld indexnproposed in this article. The finding in this article is helpful for market power monitoring and mitigating. Antwo-settlement market including a forward market and a spot market is used to describe GenCos’ strategicnforward contracting and spot market competition. Copyright © 2012 John Wiley & Sons, Ltd.