An Oligopolistic Power Market Model With Tradable NO&amp;lt;tex&amp;gt;$_rm x$&amp;lt;/tex&amp;gt;Permits

Chen, Yihsu; Hobbs, Benjamin F.

doi:10.1109/tpwrs.2004.840440

Cited by 121 publications

(65 citation statements)

References 16 publications

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“…The PJM electricity market model builds on the transmission-constrained Cournot models of Hobbs [14] and Chen and Hobbs [2]. These models are generalized to allow for Stackelberg leader-follower relationships.…”

Section: Model Statementmentioning

confidence: 99%

“…The analogues to the Kirchhoff current and voltage laws are explicitly expressed in the first two constraints (see Scheweppe et al [28], Appendix A), as opposed to using power transfer and distribution factors in the no-loss case [2]. The third constraint accounts for capacities on the transmission lines.…”

Section: Independent System Operatormentioning

confidence: 99%

“…The conclusion reached was that competition in the commodity market can be weakened. In a more recent analysis of a large-scale market with thousands of variables, Chen and Hobbs [2] used a heuristic solution algorithm to explore the profitability of a dominant producer that expands generation, overconsumes allowances, and suppresses the output of the other producers, where the producers were assumed to follow a Cournot strategy in the energy market. The analysis failed to identify the optimal joint emissions and electricity strategy for the dominant producer, possibly underestimating the magnitude of its market power.…”

Section: Introductionmentioning

confidence: 99%

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Leader-Follower Equilibria for Electric Power and NO x Allowances Markets

Chen

Hobbs

Leyffer

et al. 2006

CMS

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This paper investigates the ability of the largest producer in an electricity market to manipulate both the electricity and emission allowances markets to its advantage. A Stackelberg game to analyze this situation is constructed in which the largest firm plays the role of the leader, while the medium-sized firms are treated as Cournot followers with price-taking fringes that behave competitively in both markets. Since there is no explicit representation of the best-reply function for each follower, this Stackelberg game is formulated as a large-scale mathematical program with equilibrium constraints. The best-reply functions are implicitly represented by a set of nonlinear complementarity conditions. Analysis of the computed solution for the Pennsylvania -New Jersey -Maryland electricity market shows that the leader can gain substantial profits by withholding allowances and driving up NO x allowance costs for rival producers. The allowances price is higher than the corresponding price in the Nash-Cournot case, although the electricity prices are essentially the same.

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Section: Model Statementmentioning

confidence: 99%

Section: Independent System Operatormentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Leader-Follower Equilibria for Electric Power and NO x Allowances Markets

Chen

Hobbs

Leyffer

et al. 2006

CMS

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“…The dc approximation has been widely utilized in congestion management in electricity transmission [10,11,12,13,35]. For a discussion regarding the dc approximation, see Cheng and Overbye [13].…”

Section: A Brief Introductionmentioning

confidence: 99%

“…The empirical case study in this paper shows that this assumption is appropriate for the New England electric power market since the simulated prices match the actual prices. Additionally, the empirical study by Chen and Hobbs [12] also showed perfect competition to be a reasonable assumption for the Pennsylvania-New Jersey-Maryland electricity market (PJM).…”

Section: A Brief Introductionmentioning

confidence: 99%

An integrated electric power supply chain and fuel market network framework: Theoretical modeling with empirical analysis for New England

Liu

Nagurney

2009

Naval Research Logistics

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In this paper, we develop a novel electric power supply chain network model with fuel supply markets that captures both the economic network transactions in energy supply markets and the physical network transmission constraints in the electric power network. The theoretical derivation and analysis are done using the theory of variational inequalities.We then apply the model to a specific case, the New England electric power supply chain, consisting of 6 states, 5 fuel types, 82 power generators, with a total of 573 generating units, and 10 demand market regions. The empirical case study demonstrates that the regional electric power prices simulated by the proposed model very well match the actual electricity prices in New England. We also compute the electric power prices and the spark spread, an important measure of the power plant profitability, under natural gas and oil price variations. The empirical examples illustrate that in New England, the market/gridlevel fuel competition has become the major factor that affects the influence of the oil price on the natural gas price. Finally, we utilize the model to quantitatively investigate how changes in the demand for electricity influence the electric power and the fuel markets from a regional perspective. The theoretical model can be applied to other regions and multiple electricity markets under deregulation to quantify the interactions in electric power/energy supply chains and their effects on flows and prices.

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Overview of Electricity Market Equilibrium Problems and Market Power Analysis

Zhang

2010

Restructured Electric Power Systems

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An Oligopolistic Power Market Model With Tradable NO<tex>$_rm x$</tex>Permits

Cited by 121 publications

References 16 publications

Leader-Follower Equilibria for Electric Power and NO x Allowances Markets

Leader-Follower Equilibria for Electric Power and NO x Allowances Markets

An integrated electric power supply chain and fuel market network framework: Theoretical modeling with empirical analysis for New England

Overview of Electricity Market Equilibrium Problems and Market Power Analysis

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