Market Power Issues in Bid-Based Hydrothermal Dispatch

The objective of this work is to investigate market power issues in bid-based hydrothermal scheduling. Initially, market power was simulated with a single stage Cournot–Nash equilibrium model. In this static model the equilibrium was calculated analytically. It was shown that the total production of N strategic agents is smaller than the least-cost solution by a factor of (N/(N+1)). Market power analysis for multiple stages was then carried through a stochastic dynamic programming scheme, where the decision in each stage and state is the Cournot–Nash equilibrium of a multi-agent game. Case studies with data taken from the Brazilian system are presented.

[1]  Erik Hjalmarsson,et al.  Nord Pool: A Power Market Without Market Power , 2000 .

[2]  P. Klemperer,et al.  Supply Function Equilibria in Oligopoly under Uncertainty , 1989 .

[3]  A. Deaton,et al.  Competitive Storage and Commodity Price Dynamics , 1996, Journal of Political Economy.

[4]  E. Read,et al.  Modelling hydro reservoir operation in a deregulated electricity market , 1996 .

[5]  Lars Bergman,et al.  Market Structure and the Price of Electricity: An Ex Ante Analysis of the Deregulated Swedish Electricity Market , 1995 .

[6]  James Bushnell,et al.  Market Power in Electricity Markets: Beyond Concentration Measures , 1999 .

[7]  Lars Bergman,et al.  Competition and Prices on the Emerging Nordic Electricity Market , 1998 .

[8]  William W. Hogan,et al.  A Market Power Model with Strategic Interaction in Electricity Networks , 1997 .

[9]  M. Ventosa,et al.  Modeling competition in electric energy markets by equilibrium constraints , 1999 .

[10]  R. Green,et al.  Competition in the British Electricity Spot Market , 1992, Journal of Political Economy.

[11]  S. Borenstein,et al.  An Empirical Analysis of the Potential for Market Power in California&Apos;S Electricity Industry , 1998 .

[12]  E. Kahn,et al.  A quantitative analysis of pricing behavior in California's wholesale electricity market during summer 2000 , 2001, 2001 Power Engineering Society Summer Meeting. Conference Proceedings (Cat. No.01CH37262).

[13]  R. Baldick,et al.  PWP-078 Linear Supply Function Equilibrium: Generalizations, Application, and Limitations , 2000 .

[14]  Catherine D. Wolfram,et al.  Measuring Duopoly Power in the British Electricity Spot Market , 1999 .