Market Power Issues in Liberalized Wholesale Electricity Markets: A Review of the Literature with a Look into the Future

Pham, Thao

doi:10.3917/redp.293.0325

Cited by 7 publications

(8 citation statements)

References 60 publications

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“…Second, they could offer to sell their energy at high prices. These two different approaches lead to the same results: higher MP, higher profits, and withheld output [25,26]. This paper applied the first approach into the merit-order model to illustrate the relationship between VRE output and MP.…”

Section: The Merit-order Modelmentioning

confidence: 99%

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Optimal Variable Renewable Energy Generation Schedules Considering Market Prices and System Operational Constraints

Imcharoenkul¹,

Chaitusaney²

2021

Energies

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The maximization of output from variable renewable energy (VRE) sources considering system operational constraints (SOCs) is a traditional method for maximizing VRE generators’ profits. However, in wholesale electricity markets, VRE participation tends to reduce marginal prices (MP) because of its low marginal costs. This circumstance, called the “merit-order effect” (MOE), reduces the generators’ profits. Thus, the traditional method is possibly no longer the best and only method to maximize the generators’ profits. Moreover, the VRE support schemes also affect MP, making MOE more severe. VRE curtailment can relieve MOE, but VRE output must be decreased, thereby reducing the generators’ profits. This paper proposes a method to find the optimal VRE generation schedules that maximize VRE generators’ profits while considering the trade-off among the VRE output, MP, and SOCs. The method combines the merit-order model and the unit-commitment model solved by the optimization tools in MATLAB. Thailand’s electrical system was the test system. The result shows that VRE generators’ profits from the proposed method are significantly higher than from the traditional method when the system has high wind penetration, and the generators have no support scheme. Curtailing approximately 7–10% of wind output can increase the average MP by 23.6–30%.

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Section: The Merit-order Modelmentioning

confidence: 99%

“…Moreover, in wholesale electricity markets, one of the generators' strategic goals is withholding the electricity generation with low marginal costs from the market to increase the MP when the MP is low. VRE generators might curtail their output following their strategic aim to maximize profits from the markets [18,25,26].…”

Section: Introductionmentioning

confidence: 99%

Optimal Variable Renewable Energy Generation Schedules Considering Market Prices and System Operational Constraints

Imcharoenkul¹,

Chaitusaney²

2021

Energies

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“…Para o monitoramento do mercado, análises ex-ante e ex-post podem ser conduzidas (Pham, 2019). A segunda abordagem é feita com base nos dados históricos, enquanto a primeira se utiliza de simulações e de indicadores para prospectar cenários e comportamentos do mercado.…”

Section: Formação De Preço "Por Ofertas" Ou "Por Custos Auditados"unclassified

Avaliação Do Equilíbrio De Nash De Um Mercado Hidrotérmico De Curtíssimo Prazo Por Ofertas

COSTA¹

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“…One of the strategic goals is withholding electricity generation with low marginal costs from the energy market to increase the MPs when the prices are low. VRE generators might curtail their output following their strategic aim to maximize market profits [36][37][38]. However, VRE curtailment can be problematic.…”

Section: Problem Statementmentioning

confidence: 99%

“…1.8 Studying the VRE impact mitigation from both the electrical systems' side [18,35,68,69], i.e., enhancing the flexibility of existing power plants, and the markets' side, i.e., bidding strategies [36][37][38][39][70][71][72][73].…”

mentioning

confidence: 99%

Impact analysis of variable renewable energy integration on total system costs and electricity generation revenue and impact mitigation

Imcharoenkul

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Variable renewable energy (VRE) integration creates additional costs, called integration costs. These costs have grown with VRE penetration, potentially increasing the total system costs delivered to customers (direct integration costs) and decreasing electricity generation revenue, discouraging investment by generators (indirect integration costs). Thus, integration costs can serve as an economic barrier to the integration of high VRE shares. The main objective of this dissertation is to propose a novel method of determining the impacts of VRE integration on total system costs and electricity generation revenue. With this method, the optimal generation mix and optimal generation schedules at the specific VRE penetration level in different study cases were provided.�The impacts of VRE integration on total system costs and electricity generation revenue were highlighted, alongside the direct and indirect integration costs.�Moreover, the profitability of electricity generation was evaluated. Aside from its main objective, this dissertation more comprehensively includes assessments�of VRE impact mitigation through enhancing the flexibility of existing power plants and the use of a bidding strategy.�To determine VRE-relevant plans and policies, electrical system planners and policymakers must prioritize the severity of integration costs grown with VRE penetration, which impacts total system costs and electricity generation revenue. Both energy markets and capacity mechanisms are crucial for the profitability of generators. Moreover, system planners and policymakers could consider several ways to mitigate the impact of VRE integration. For one, enhancing system flexibility�decreases the total system cost. Second, bidding strategies could also help generators manage energy market challenges.�

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Market Power Issues in Liberalized Wholesale Electricity Markets: A Review of the Literature with a Look into the Future

Cited by 7 publications

References 60 publications

Optimal Variable Renewable Energy Generation Schedules Considering Market Prices and System Operational Constraints

Optimal Variable Renewable Energy Generation Schedules Considering Market Prices and System Operational Constraints

Avaliação Do Equilíbrio De Nash De Um Mercado Hidrotérmico De Curtíssimo Prazo Por Ofertas

Impact analysis of variable renewable energy integration on total system costs and electricity generation revenue and impact mitigation

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