scholarly journals Competition in Power Generation: Ex-ante Analysis of Indonesia’s Electricity Market

Energies ◽  
2020 ◽  
Vol 13 (24) ◽  
pp. 6741
Author(s):  
Dzikri Firmansyah Hakam ◽  
Sudarso Kaderi Wiyono ◽  
Nanang Hariyanto
Keyword(s):  
Power System ◽  
Market Structure ◽  
Market Power ◽  
Electricity Markets ◽  
Electricity Market ◽  
Regulatory Reform ◽  
Optimal Number ◽  
Load Flow ◽  
Utility Company ◽  
Competitive Electricity Markets

This research optimises the mix and structure of Generation Companies (GenCos) in the Sumatra power system, Indonesia. Market power, indicating the ability to raise prices profitably above the competitive level, tends to be a significant problem in the aftermath of electricity market restructuring. In the process of regulatory reform and the development of competitive electricity markets, it is desirable and practical to establish an efficient number of competitor GenCos. Simulations of a power system account for multi-plant mergers of GenCos subject to a regulatory measure of the Residual Supply Index and the influence of direct current load flow and the topology of the system. This study simulates the Sumatra power system in order to determine the following: optimal market structure, efficient GenCo generation mix, and the optimal number of competitive GenCos. Further, this study seeks to empirically optimise the electricity generation mix and electricity market structure of the Sumatra power system using DC load flow optimisation, market power index, and multi-plant monopoly analysis. The simulations include generation and transmission constraints to represent network constraints. This research is the first to analyse the Sumatra power system using imperfect (Cournot) competition modelling. Furthermore, this study is the first kind to optimise the mix and structure of the Sumatra generation power market. The guidelines and methodology in this research can be implemented in other countries characterised by a monopoly electricity utility company.

scholarly journals Essays on the Interaction  Between Risk and Market  Structure in Electricity  Markets

2021 ◽  
Author(s):  
◽  
Gabriel Godofredo Fiuza de Braganca
Keyword(s):  
Market Structure ◽  
Market Power ◽  
Electricity Markets ◽  
Electricity Market ◽  
Hybrid Approach ◽  
Spot Market ◽  
Spot Price ◽  
Policy Makers ◽  
Forward Markets ◽  
Electricity Spot Market

<p>This thesis proposes a new framework to jointly analyze electricity spot market and hedging decisions in an oligopolistic setup. Firstly, we find that, when exogenous, both quantity of electricity hedged by contract and vertical integration decrease the equilibrium spot price. Secondly, we use a hybrid approach and show that market structure can affect a generator’s decision to vertically integrate under uncertain demand. Thirdly, we consider uncertainty in costs and demand and show that concentration in the spot market, for a given hedge quantum, can increase forward prices and affect the slope of the forward curve. Our empirical results indicate that the model fits the New Zealand electricity market well. This evidence that market structure and hedging decisions are closely connected is further explored in a three period equilibrium model for the spot and forward markets, where hedging occurs prior to the submission of supply curves. Taking into account demand-side and supply-side uncertainties, we find that when hedging is endogenous, hedging quantities are affected by spot market parameters, but market power is itself mitigated in the conscious hedging choice of generators. We also show that forward markets can coexist with highly vertically integrated markets. The importance of our results is general. Our models can be used by policy makers to analyze investment and forward price implications of changes in the spot market structure. Our results also indicate that electricity generators, in equilibrium, face a trade-off between market power and hedging. Given that it is socially beneficial to manage risk, the equilibrium impact of their choices on welfare should not be considered in isolation by competition authorities.</p>

scholarly journals Essays on the Interaction  Between Risk and Market  Structure in Electricity  Markets

2021 ◽  
Author(s):  
◽  
Gabriel Godofredo Fiuza de Braganca
Keyword(s):  
Market Structure ◽  
Market Power ◽  
Electricity Markets ◽  
Electricity Market ◽  
Hybrid Approach ◽  
Spot Market ◽  
Spot Price ◽  
Policy Makers ◽  
Forward Markets ◽  
Electricity Spot Market

<p>This thesis proposes a new framework to jointly analyze electricity spot market and hedging decisions in an oligopolistic setup. Firstly, we find that, when exogenous, both quantity of electricity hedged by contract and vertical integration decrease the equilibrium spot price. Secondly, we use a hybrid approach and show that market structure can affect a generator’s decision to vertically integrate under uncertain demand. Thirdly, we consider uncertainty in costs and demand and show that concentration in the spot market, for a given hedge quantum, can increase forward prices and affect the slope of the forward curve. Our empirical results indicate that the model fits the New Zealand electricity market well. This evidence that market structure and hedging decisions are closely connected is further explored in a three period equilibrium model for the spot and forward markets, where hedging occurs prior to the submission of supply curves. Taking into account demand-side and supply-side uncertainties, we find that when hedging is endogenous, hedging quantities are affected by spot market parameters, but market power is itself mitigated in the conscious hedging choice of generators. We also show that forward markets can coexist with highly vertically integrated markets. The importance of our results is general. Our models can be used by policy makers to analyze investment and forward price implications of changes in the spot market structure. Our results also indicate that electricity generators, in equilibrium, face a trade-off between market power and hedging. Given that it is socially beneficial to manage risk, the equilibrium impact of their choices on welfare should not be considered in isolation by competition authorities.</p>

scholarly journals Electricity market efficiency and voltage stability

2021 ◽  
Author(s):  
Ayman Helmy Mostafa Elkasrawy
Keyword(s):  
Power System ◽  
Market Efficiency ◽  
Electricity Markets ◽  
Electricity Market ◽  
Voltage Stability ◽  
Electric Power System ◽  
Maximum Efficiency ◽  
Best Interest ◽  
The Relationship ◽  
System Layout

Several electricity markets were created in the last two decades by deregulation and restructuring vertically integrated utilities. In order to serve the best interest of participating entities, it is important to operate electricity markets at their maximum efficiency. In most cases, electricity markets were formed to operate on existing physical power systems that had evolved over several decades as vertically integrated utilities. Location of generating stations, large urban load centers and enabling transmission systems were unique to every power system and followed the 'lay of the land'. Depending upon a power system layout, voltage stability and margin to voltage collapse are unique to it. While an electricity market is to be operated efficiently, its optimal generation schedule to supply energy through an electric power system has to be reliable and meet the strict standards including those that relate to voltage stability. This work elicits the relationship between market efficiency and voltage stability. To this end, a formulation and a solution algorithm are presented. Two contrasting 5-bus cases illustrate how the transmission system layout influences the relationship between voltage stability and market efficiency. The IEEE 118-bus system is also used to illustrate this relationship.

scholarly journals Operational Planning and Bidding for District Heating Systems with Uncertain Renewable Energy Production

Energies ◽  
2018 ◽  
Vol 11 (12) ◽  
pp. 3310 ◽  
Author(s):  
Ignacio Blanco ◽  
Daniela Guericke ◽  
Anders Andersen ◽  
Henrik Madsen
Keyword(s):  
Renewable Energy ◽  
Power Systems ◽  
Power System ◽  
Electricity Markets ◽  
Electricity Market ◽  
Renewable Energy Sources ◽  
District Heating ◽  
Operational Planning ◽  
Solution Approach ◽  
The Impact

In countries with an extended use of district heating (DH), the integrated operation of DH and power systems can increase the flexibility of the power system, achieving a higher integration of renewable energy sources (RES). DH operators can not only provide flexibility to the power system by acting on the electricity market, but also profit from the situation to lower the overall system cost. However, the operational planning and bidding includes several uncertain components at the time of planning: electricity prices as well as heat and power production from RES. In this publication, we propose a planning method based on stochastic programming that supports DH operators by scheduling the production and creating bids for the day-ahead and balancing electricity markets. We apply our solution approach to a real case study in Denmark and perform an extensive analysis of the production and trading behavior of the DH system. The analysis provides insights on system costs, how DH system can provide regulating power, and the impact of RES on the planning.

International Perspectives on Electricity Market Monitoring and Market Power Mitigation

2007 ◽  
Vol 6 (3) ◽  
Author(s):  
José A. García ◽  
James D. Reitzes
Keyword(s):  
Market Power ◽  
Electricity Markets ◽  
Electricity Market ◽  
Information Disclosure ◽  
Design Features ◽  
Disclosure Requirements ◽  
Market Monitoring ◽  
International Perspectives ◽  
Ex Post ◽  
Bilateral Trading

We review the different market monitoring and market-power mitigation policies that arise in world electricity markets. Regulators for electricity markets apparently respond to differences in underlying market structure and design features when choosing between ex-ante (that is, rule-based) behavioral restrictions as opposed to ex-post enforcement (that is, investigations and sanctions) as the principal means for deterring abuses of market power. Particular design features that influence market-monitoring policies are whether the market is one-part (energy only) versus two-part (energy and capacity), and whether there is centralized or bilateral trading. Information-disclosure requirements also are a key element of market monitoring.

scholarly journals A New Model to Simulate Local Market Power in a Multi-Area Electricity Market: Application to the European Case

Energies ◽  
2019 ◽  
Vol 12 (11) ◽  
pp. 2068 ◽  
Author(s):  
Alberto Orgaz ◽  
Antonio Bello ◽  
Javier Reneses
Keyword(s):  
Power Systems ◽  
Market Power ◽  
Electricity Markets ◽  
Electricity Market ◽  
Imperfect Competition ◽  
System Analysis ◽  
Original Method ◽  
Local Market ◽  
The Status ◽  
New Policies

The work presented in this article proposes an original method that models the medium-term market equilibrium under imperfect competition circumstances in multi-area electricity systems. It provides a system analysis considering multiple market splitting possibilities, where local market power may appear according to the status of the interconnections. As a result of new policies and regulations, power systems are increasingly integrating the existing electricity markets in unified frameworks. The integration of electricity markets poses highly challenging tasks due to the uncertainty that comes from the agents’ strategic behaviors which depend on multiple factors, for instance, the state of the interconnections. When it comes to modeling these effects, the purpose is to identify each strategy by using conjectured-price responses that depend on the different states of the system. Consequently, the problem becomes highly combinatorial, which heightens its size as well as its complexity. Therefore, the purpose of this work’s methodology is the reduction of the possible network configurations so as to ensure a computational tractability in the problem. In order to validate this methodology, it has been put to the test in a realistic and full-scale two-year operation planning model of the European electricity market that consists of a group of nine countries.

Modelling of green electricity effects on oligopoly market

2011 ◽  
Vol 225 (8) ◽  
pp. 1007-1015
Author(s):  
M T Meszaros ◽  
S O Bade Shrestha
Keyword(s):  
Computational Model ◽  
Simulation Model ◽  
Market Structure ◽  
Market Power ◽  
Electricity Market ◽  
Fossil Fuel ◽  
Green Electricity ◽  
Capacity Limits ◽  
Minimum Requirement ◽  
Capacity Limit

This article builds a simulation model to analyse the effect of a change in the main policy variables of the British Renewable Obligation System, i.e. how the increase in the minimum requirement of green electricity can affect the prices and quantities in the electricity market under oligopoly market structure. The results show that the increasing quota obligation increases the price of electricity. The outcomes of this computational model emphasize the importance of the capacity limit which can constrain the market power and increase the competition in the market. In addition, the simulation shows that the integration of fossil-fuel and renewable producers has very small effect on production and prices because of the capacity limits.

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