Proposing new analytical price‐based market power and coalition indices based on LMP share in double‐sided power market

Abstract

One of the strategic actions to gain more profit in the electricity market is to exercising market power as a leverage in exclusive situations. The main goal of this article is to assess load serving entities market power via self-action scramble by price-based indices as an application of the structural decomposition approach.In addition, the possibility of forming a beneficial coalition due to the cross interactions between players can be evaluated using the proposed indices. These coalitions may be occurred between two generation units, two load serving entities, or a generation unit and a load serving entity. The cumulative sharing impacts of one load serving entity on the locational marginal prices of all units owned by a GenCo is also defined as a new index. To achieve this goal, the first step is to extract the structural decomposition coefficients of market components consisting of suppliers, inelastic, and elastic loads, which determine the contribution of all players on the electricity price separately. In the second step, new structural indices to determine self/cross-share index of each player in the electricity price based on the contributing factors obtained from the decomposition process. So, it is possible for market operator to prioritize the potential of exercising market power and forming coalition with a price-based index for both-sides players. As well, it is important for market operators to explore the economic justification of relationships between players to prevent market deviation. The proposed approach is evaluated on the IEEE 24-bus system, and the results are discussed.List of Symbols and Abbreviations: SG, set of all generators; D, set of all demands; L, set of all transmission lines; N G :N G , set of upper and lower bounded generators; N G , set of marginal generation units; N D , set of all fully dispatch elastic loads; N D , set of all partial dispatch elastic loads; L cong , set of all congested lines; n, bus number; a i , intercept of bid function for generator i; b i , slope of bid function for unit i; c j , intercept of offer function for load j; d j , slope of offer function for load j; P max l , upper flow limits of line l; P max g , P min g , upper/lower active power limit of generators; P max e , P min e , upper/lower active power limit of LSEs; P inelastic j , the active power of jth inelastic load; P d , total dispatched active power consist of elastic and inelastic load; P frc , total forecasted active power load; P g i , the active power generated by ith unit; P ej , the active power of jth LSE; α l:i , power transmission distribution factor of line l with respect to node ith generator; α l:j , power transmission distribution factor of line l with respect to node jth load; λ, Lagrange multiplier of the equality constraint; μ max i , μ min i , Lagrange multiplier of maximum/minimum generation limits refer to ith unit; Γ max l , Γ min l , Lagrange multiplier of the upper/lower of line flow limits refer to lth transmission line; ω max n , ω min n , Lagrange multiplier o...