Screening instruments for monitoring market power — The Return on Withholding Capacity Index (RWC)

Bataille, Marc; Bodnar, Olivia; Steinmetz, Alexander; Thorwarth, Susanne

doi:10.1016/j.eneco.2019.03.011

Cited by 19 publications

(12 citation statements)

References 20 publications

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“…The Lerner index (LI) is presented by Zhao et al (2003) based on the market efficiency design. In addition, Patton (2003) brings forward the Residual Supply Index (RSI), and Bataille et al (2019) proposed the "Return on Withholding Capacity Index" (RWC) as a complementary index to the RSI. Amanibeni (2021) proposes a comprehensive approach for market power detection based on a centrality concept in social network analysis (SNA), and the obtained results show that SNA can be used as an effective tool for monitoring the market power in future smart grids with a plenty of players and complexity.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on the Internal and External Monitoring Mechanism of the Electricity Market in the Spot Market: From the Perspective of the Evolutionary Game Theory

Jin¹,

Liu²,

Chen³

et al. 2022

Front. Energy Res.

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The internal and external monitoring mechanism is a beneficial monitoring mode which is in line with the current national condition, the situation of the power grid, and the construction progress of the power spot market. However, the independence of third-party monitoring agencies cannot be completely guaranteed because of the incomplete management system of China’s electricity market at present. Therefore, the market is prone to power rent-seeking in which third-party monitoring agencies conspire with the market internal monitoring organization. Based on the evolutionary game theory, this study constructed a coordination game model between third-party monitoring agencies and the market internal monitoring organization, as well as an asymmetric coordination game model between the interest group composed of internal and external monitoring agencies and government regulatory authorities. By analyzing the evolutionarily stable strategy of each game participant, the study identified the underlying factors that affect the strategic choices made by internal and external monitoring agencies and government regulatory authorities and then put forward some reasonable suggestions for reducing the probability of third-party monitoring agencies colluding with internal monitoring organizations so that the efficiency of internal and external monitoring mechanisms can be improved.

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Section: Literature Reviewmentioning

confidence: 99%

Research on the Internal and External Monitoring Mechanism of the Electricity Market in the Spot Market: From the Perspective of the Evolutionary Game Theory

Jin¹,

Liu²,

Chen³

et al. 2022

Front. Energy Res.

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“…The author states that sustainability in the energy sector is not necessarily available at the lowest market prices for consumers. Bataille et al (2019) state that varying renewable energy sources (RES) can be said to compete on a separate market, whereas the conventional plants then only compete for the residual demand (the total load minus the load of variable renewables). When more renewable electricity production is implemented, conventional energy might become scarce, which can increase the risk of market power.…”

Section: Present Without Compromising the Ability Of Future Generatiomentioning

confidence: 99%

“…Although the Lerner index is a reliable measure of market power, it is rarely used for electricity markets due to the lack of available cost data that is needed for the calculations. (Bataille et al, 2019). The Lerner index requires marginal cost data for each production unit at a given time.…”

Section: The Lerner Indexmentioning

confidence: 99%

“…As for the HHI, the Lerner index cannot take the impact of transmission constraints and the physical electricity system into account. Moreover, Bataille et al (2019) see the sensitivity of the Lerner index to the absolute cost level as a problem, since it makes the index vulnerable to inaccuracies in cost level estimations. The Lerner index can also lead to misinterpretation if calculated for a longer period of time.…”

Section: The Lerner Indexmentioning

confidence: 99%

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Wind power impact on market power on the Finnish electricity market

Hansson

Farsaei

Syri

2020

2020 17th International Conference on the European Energy Market (EEM)

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Energy is a fascinating subject to study. Not only is the whole energy industry undergoing a historical transition, but the problems we face require knowledge in both technology, economics and social sciences, which makes them both interesting and demanding. I feel privileged to have been able to combine all these aspects in my studies and to be part of the energy transition that is going on in the world. To be able to combine these perspec-Thesis as well has been a cherry on top. I want to thank my supervisor, Professor Sanna Syri, for providing me the opportunity to study this interesting topic and letting me be part of the Energy Efficiency and Systems group at Aalto University. Thank you Sanna for your valuable comments and words of encouragement. I also want to thank my advisor Anahita Farsaei for all the tips and support along the way. Thank you Ana for sharing your knowledge about market power indices and making me question my calculations. All my other colleagues at Aalto deserve a thank you as well. Thank you, especially Ville, for helping me with the data for the Lerner index and thank you Tiia for all the discussions and great lunch company. As this thesis marks the end of my studies, I want to thank all of you that have made my years at Aalto and in Otaniemi both many and unforgettable. Without all the amazing people I have met, I would probably have graduated a lot quicker, but many life lessons and fun experiences shorter. After all, the courses can only teach you so much. So thank you Teknologföreningen for letting me bear responsibility and for being a home, thank you for all the Friday laughs and bubbles, the sorts of things that keep you going. Thank you Phux 15 for letting me be your Phuxivator and FTMK for making me Feel so welcome over the language barrier in Otaniemi. Thank you Laulikki Äpy and everyone at Rektorsgatan 1 for all the fun times, and not without a reason. Lastly, I want to thank my family, grandparents and everyone else who have supported me through the years. Thank you Mamma and Pappa for always believing in me. I always knew I could do it, thanks for you always knowing it too. And finally, thank you Markus for being by my side all along.

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“…Hence, the adoption of strategic behavior aimed at gaining more profits in the market is a logical routine. In order to relieve market power from the demand side, there are two solutions as in the supply side [8]: 1) Physical withholding (demand flexibility) and…”

Section: Introductionmentioning

confidence: 99%

A bi-level model for strategic bidding of a price-maker retailer with flexible demands in day-ahead electricity market

Sharifi

Anvari‐Moghaddam

Fathi

et al. 2020

International Journal of Electrical Power & Energy Systems

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Screening instruments for monitoring market power — The Return on Withholding Capacity Index (RWC)

Abstract: The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor.

Cited by 19 publications

References 20 publications

Research on the Internal and External Monitoring Mechanism of the Electricity Market in the Spot Market: From the Perspective of the Evolutionary Game Theory

Research on the Internal and External Monitoring Mechanism of the Electricity Market in the Spot Market: From the Perspective of the Evolutionary Game Theory

Wind power impact on market power on the Finnish electricity market

A bi-level model for strategic bidding of a price-maker retailer with flexible demands in day-ahead electricity market

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