A new design for market power monitoring in the electricity market. A simulation for Italy

Abstract The liberalization of electricity markets has been dominated by conditions oligopoly and market power, as shown in numerous studies empirical literature on the supply side. However, regulators have used statistical measurements to monitor extent making little reference founded theoretical approaches. This paper provides a new contribution presenting model construct competitive equilibrium, estimating power both demand side day-ahead market. We implement an accurate measurement welfare loss associated with non-competitive conditions, based ex-ante behavior.This useful analytical tool for policy-makers order pro-competitive regulation. perform simulation show effects equilibria Italian hourly over period 2013–2014. In ideal market, prices would be lower than historical about 2–5% quantities higher 0.5–1%.