Market Power in a Power Market with Transmission Constraints

Impact of Participants’ Market Power and Transmission Constraints on GenCos’ Nash Equilibrium Point

Unlike perfect competitive markets, in oligopoly electricity markets due to strategic producers and transmission constraints GenCos may increase their own profit through strategic biddings. This paper investigates the problem of developing optimal bidding strategies of GenCos considering participants’ market power and transmission constraints. The problem is modeled as a bi-level optimizati...

Transmission Rights and Market Power

Historically, the primary barrier to greater competition in the electricity industry has been the vertical integration of most firms. Control of the transmission grid can advantage some competitors at the expense of others. In electricity markets around the world, policymakers have attempted to solve this problem through the creation of independent ‘gridcos’ or ‘system operators’ that either ow...

PWP - 062 Transmission Rights and Market Power

How Financial Transmission Rights Curb Market Power

This paper demonstrates that financial transmission rights allow their owners to capture at least a portion, and sometimes all, of the congestion rents. This extends work in this area by Shmuel Oren which was limited to the case in which generators could not purchase financial transmission rights. One form of financial rights, Transmission Congestion Contracts (TCCs), is shown to be so effectiv...

Nord Pool : A Power Market Without Market Power

Regulatory reform in the Nordic electricity-supply markets has resulted in a single integrated Nordic electricity market. This paper performs an econometric study of market power in the spot market of Nord Pool, the joint Nordic power exchange. I use a dynamic extension of the Bresnahan-Lau model, and weekly data for the period from 1996 through April 1999. To my knowledge, this is the first st...