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

Hakam, Dzikri Firmansyah; Wiyono, Sudarso Kaderi; Hariyanto, Nanang

doi:10.3390/en13246741

Cited by 9 publications

(4 citation statements)

References 30 publications

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“…A few studies have investigated the effects of electricity market deregulation and liberalization of electricity markets on electricity prices, with mixed results between the initial price decline and later increases [1][2][3][4][5][6][7][8][9][10][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40][41][42][73][74][75][76].…”

Section: Hypothesis 4 (H4)mentioning

confidence: 99%

“…The electricity markets in developed and developing countries have undergone substantial reforms that have been induced by market deregulation and price liberalization [1][2][3][4][5], with an aim to become more competitive and efficient [6][7][8][9][10]. Electricity is one of the key goods in consumers' daily needs, and as such, is at the core of economy cost efficiency and household welfare [11,12].…”

Section: Introductionmentioning

confidence: 99%

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Electricity Markets during the Liberalization: The Case of a European Union Country

Bojnec

Križaj

2021

Energies

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This paper analyzes electricity markets in Slovenia during the specific period of market deregulation and price liberalization. The drivers of electricity prices and electricity consumption are investigated. The Slovenian electricity markets are analyzed in relation with the European Energy Exchange (EEX) market. Associations between electricity prices on the one hand, and primary energy prices, variation in air temperature, daily maximum electricity power, and cross-border grid prices on the other hand, are analyzed separately for industrial and household consumers. Monthly data are used in a regression analysis during the period of Slovenia’s electricity market deregulation and price liberalization. Empirical results show that electricity prices achieved in the EEX market were significantly associated with primary energy prices. In Slovenia, the prices for daily maximum electricity power were significantly associated with electricity prices achieved on the EEX market. The increases in electricity prices for households, however, cannot be explained with developments in electricity prices on the EEX market. As the period analyzed is the stage of market deregulation and price liberalization, this can have important policy implications for the countries that still have regulated and monopolized electricity markets. Opening the electricity markets is expected to increase competition and reduce pressures for electricity price increases. However, the experiences and lessons learned among the countries following market deregulation and price liberalization are mixed. For industry, electricity prices affect cost competitiveness, while for households, electricity prices, through expenses, affect their welfare. A competitive and efficient electricity market should balance between suppliers’ and consumers’ market interests. With greening the energy markets and the development of the CO2 emission trading market, it is also important to encourage use of renewable energy sources.

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Section: Hypothesis 4 (H4)mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Electricity Markets during the Liberalization: The Case of a European Union Country

Bojnec

Križaj

2021

Energies

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“…In an immature electricity market, due to the oligopoly of the generation side, some generation companies may have great market power. Therefore, market power supervision is one of the key tasks for PX to promote the reform of electricity market (Hakam et al, 2020). The commonly used market power indicators include the Herfindahl-Hirschman index (HHI), must run ratio (MRR), the Lerner index (LI), etc.…”

Section: The Lower Level Model: An Optimal Generation Companies Bidding Strategy Model Based On Robust Optimization Theorymentioning

confidence: 99%

Optimal Planned Electricity Allocation Model for Power Exchange Under the Plan-Market Double-Track Mechanism

Tang

Zhang

et al. 2021

Front. Energy Res.

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The orderly deregulation of planned electricity generation and consumption is an important measure for electricity market reform in several countries (such as China), and a reasonable proportion of planned electricity in the total energy consumption is conducive to the smooth transition from the regulation mode to the market mode. Under the plan-market double-track mechanism (PMDM) implemented, a modified linear bidding function of generation companies (GCs) is first proposed, and the unified clearing price of unilateral generation market is determined accordingly. Second, considering the robust bidding strategies of generation companies, a bi-level optimal planned electricity allocation model for power exchange (PX) is constructed. In the upper level, the proportion of planned electricity is optimized by PX to minimize the CVaR of Lerner Index (LI), so as to maintain the market power at a low level. In the lower level, based on the robust optimization theory and the prediction of rival bidding, the bidding strategy of a GC is optimized by solving a specified max–min problem. Simulations based on data from a provincial electricity market in China illustrate that the market power can be reduced through a reasonable proportion of planned electricity designed by the PX. In addition, when more GCs tend to avoid a market risk, the proportion of planned electricity can be increased accordingly.

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“…In a highly concentrated market, large-capacity generation companies may use market power to raise market prices, resulting in market price distortion and social welfare losses (Bagchi et al, 2019;Hajiabadi and Samadi, 2019). It is necessary for PX to consider the market structure of the generation side when allocating planned electricity and market electricity, so as to ensure appropriate market adequacy, restrain market power, and realize full market competition (Hakam et al, 2020).…”

Section: Planning-market Electricity Allocation Problem Considering M...mentioning

confidence: 99%

Optimal Electricity Allocation Model Under China's Planning-Market Double-Track Mechanism Considering Bidding Game of Generation Companies

Cui

et al. 2021

Front. Energy Res.

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In China, under the planning-market double-track mechanism implemented on the generation side of electricity, unreasonable market-oriented power generation proportion may lead to unnecessary vicious competition and market price changes, and it is against the will of power exchange (PX). Given this background, in this study, a bi-level model for planning-market electricity allocation that considers the bidding game of generation companies is proposed for a smooth transition of power system reform. In the upper level of the model, the proportion of planned electricity is optimized by PX to minimize the average social electricity purchase price. In the lower level of the model, considering the impact of market power on the bidding strategy of generation companies, the bidding strategy of generation companies set as price makers is proposed using the residual demand curve analysis method, while the price takers adopt the lowest bidding strategy. Simulations based on data from a provincial electricity market in China illustrate that the proposed model can effectively reflect the impact of market-oriented electricity proportion on market power and market-clearing price, thus providing a quantitative basis for PX to determine the proportion of market-oriented electricity in total electricity consumption.

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

Cited by 9 publications

References 30 publications

Electricity Markets during the Liberalization: The Case of a European Union Country

Electricity Markets during the Liberalization: The Case of a European Union Country

Optimal Planned Electricity Allocation Model for Power Exchange Under the Plan-Market Double-Track Mechanism

Optimal Electricity Allocation Model Under China's Planning-Market Double-Track Mechanism Considering Bidding Game of Generation Companies

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