Measuring market power and the efficiency of Alberta's restructured electricity market: An energy‐only market design

Brown, David P.; Olmstead, Derek E. H.

doi:10.1111/caje.12280

Cited by 42 publications

(48 citation statements)

References 36 publications

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“…We consider Alberta electricity market as an imperfect market since the suppliers in this market are not forced to submit their actual marginal costs as offer prices [38]. In other words, they are allowed to submit their capacity These two cases refer to an imperfect market, in which the storage facility behaves strategically, i.e., it offers/bids at quantities and prices that might be different than its actual installed capacity and marginal costs.…”

Section: B Case Studymentioning

confidence: 99%

See 1 more Smart Citation

Strategic Sizing of Energy Storage Facilities in Electricity Markets

Nasrolahpour

Kazempour

Zareipour

et al. 2016

IEEE Trans. Sustain. Energy

131

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Section: B Case Studymentioning

confidence: 99%

“…An analysis on Alberta market-clearing outcomes from 2008 to 2014 has been carried out in [38], which shows exercising significant market power during this period of study. The interest in integrating energy storage facilities into Alberta's market has grown considerably over the past few years [39].…”

Section: B Case Studymentioning

confidence: 99%

Strategic Sizing of Energy Storage Facilities in Electricity Markets

Nasrolahpour

Kazempour

Zareipour

et al. 2016

IEEE Trans. Sustain. Energy

131

View full text Add to dashboard Cite

“…The expiration of these PPAs in 2020 represents a sizable and important market structure change in Alberta. Notes: Generation capacities by firm, year, and fuel type are obtained from Brown and Olmstead (2016). Fringe contains 29 small firms.…”

Section: Alberta's Electricity Marketmentioning

confidence: 99%

“…Due to computational complexity, we are unable to solve the non-convex unit-commitment problem in the context of our Cournot model. 26 Brown and Olmstead (2016) illustrate that firms exercise limited market power in the off-peak hours in Alberta. 27 In April and May 2013, there were several hours with extreme price spikes due to idiosyncratic unit outages.…”

Section: Observed Outcomes and Estimated Forward Positionsmentioning

confidence: 99%

Analyzing the Impact of Electricity Market Structure Changes and Mergers: The Importance of Forward Commitments

Brown

Eckert

2016

SSRN Journal

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We investigate how the effects of market structure changes and mergers in restructured electricity markets depend on the level of forward contracting. Following Bushnell, Mansur, and Saravia (2008), we develop a Cournot model of Alberta's wholesale electricity market that incorporates firms' forward positions. Using data from 2013 -2014, we estimate the monthly forward positions of the five largest firms in the market, and simulate the effects of different market structure changes, including variations of a hypothetical merger with asset divestitures. We examine the sensitivity of the simulated effects of mergers and other market structure changes to assumptions regarding firms' forward commitments. We demonstrate that the wholesale market impacts of mergers and market structure changes depend critically on firms' forward commitments in the post market structure change equilibrium. Our paper demonstrates the importance of establishing a clear understanding of the size and nature of forward commitments in forecasting the effects of mergers and other market structure changes in wholesale electricity markets.

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“…However, high levels of market concentration and oligopolistic conditions still prevail in various countries [1]. Additionally, due to the technical characteristics of the electricity supply industry, market power is only imperfectly correlated with concentration measures and can be exercised by small firms during peak hours [2], [3]. Ref.…”

Section: Introductionmentioning

confidence: 99%

A Bayesian Inference Approach to Unveil Supply Curves in Electricity Markets

Mitridati

2018

IEEE Trans. Power Syst.

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Abstract-With increased competition in wholesale electricity markets, the need for new decision-making tools for strategic producers has arisen. Optimal bidding strategies have traditionally been modeled as stochastic profit maximization problems. However, for producers with non-negligible market power, modeling the interactions with rival participants is fundamental. This can be achieved through equilibrium and hierarchical optimization models. The efficiency of these methods relies on the strategic producer's ability to model rival participants' behavior and supply curve. But a substantial gap remains in the literature on modeling this uncertainty. In this study we introduce a Bayesian inference approach to reveal the aggregate supply curve in a day-ahead electricity market. The proposed algorithm relies on Markov Chain Monte Carlo and Sequential Monte Carlo methods. The major appeal of this approach is that it provides a complete model of the uncertainty of the aggregate supply curve, through an estimate of its posterior distribution. We show on a small case study that we are able to reveal accurately the aggregate supply curve with no prior information on rival participants. Finally we show how this piece of information can be used by a price-maker producer in order to devise an optimal bidding strategy.

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Measuring market power and the efficiency of Alberta's restructured electricity market: An energy‐only market design

Abstract: Short excerpts of these working papers may be quoted without explicit permission provided that full credit is given to the source.

Cited by 42 publications

References 36 publications

Strategic Sizing of Energy Storage Facilities in Electricity Markets

Strategic Sizing of Energy Storage Facilities in Electricity Markets

Analyzing the Impact of Electricity Market Structure Changes and Mergers: The Importance of Forward Commitments

A Bayesian Inference Approach to Unveil Supply Curves in Electricity Markets

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