Researche On Strategies And Methods Of Market Power Regulation In Electricity Market

The marketing operation has been a main direction for electric power industry in the world and necessary method for sustainable development. The reform of electric power industries in the world aims to establish a matured and effective electric power market. However, market power is very easy to arise from monopoly industry, even in the transitional phase of turning to competitive industry, which leads to low productivity, unreasonable resource configuration, loss of social welfare and unfair distribution of social benefit, and it's difficult to estimate and control, which influences the development of electric power market healthily and becomes one of focuses and difficulties during the reform of electric power industry regulations. In this thesis, the Industry Economics, Welfare Economics, Regulation Economics and Stimulation Theory are used, and some regulation problems as the cause of market power, identity, estimate and control of market power are deeply and systematically researched in the dissertation after learning from the research results of market power regulation theory and practice experience in different countries. In particular, this thesis gives a suit of systematic, scientific and effective methods for controlling the market power in electric power industry after monopoly is weakened, which help to guarantee the good development of electric power market as well as the reach of reform target, on the other hand, to enrich the research achievements of regulation theory. Main researches and innovations of this thesis are shown as fallows:1.In this thesis, the technique and economic characteristics of electric power industry are analyzed firstly, and the causes generating market power and the necessary regulating market power are discussed to find effective methods for controlling the market power. The natural monopoly characteristics and the utility attributes of electric power industry, the applicability of contestable market theory and stimulation theory in electric power market, and the application of governmental regulation theory on electric power industry, all above will be used to find the economic foundations of regulating the market power in electric power industry, which will ensure a scientific and reasonable research result.2.This thesis discusses the application, the advantages and disadvantages of all theoretic methods and measures at home or abroad for identifying and estimating the market power by the qualitative and quantitative analyses, on which a new method for estimating the market power in the electric power market, that is the estimation methodof social welfare loss rate is researched, also the standard for evaluating market power is given. The new method help to increase the accuracy of estimating the market power, and it is the premise and base for controlling market power reasonably and effectively.3. YoimdiTig tm socia\ -wt;\fcat; Vnwry cmd Titm-coopeTative competition game theory, and considering the technique and economic characteristics of electric power industry, this thesis gives an optimization method of deciding market competition scale that choose optimal providers and their quantities basing on the principle of maximizing social welfare. The short-term optimization problem deciding market competition scale is focused, and the optimization model, actual solution method and application example for it are provided. From the optimization results, it can be seen that reasonable market competition scale is an effective measure decreasing the market price and then controlling the market power from source.4. By analyzing the characteristics and results of various longitudinal separation models of electric power industry in the world, the necessary and feasibility on applying longitudinal separation models on electric power industry in China are discussed according to the actuality of Chinese electric power industry reform. Three steps including first model, interim model and ideal model of carrying out longitudinal separation models in China gradually are designed, and the characteristics, operation conditions, advantages and disadvantages, and feasibility problems on each model are deeply discussed in dissertation. We can enhance the competitiveness of electric power market in our country, then decrease power price and control the market power by constructing modestly competitive generation and supply market and establishing an effective customer side electric power market.5. After analyzing several tariff mechanisms in the oligopoly market, another three possible ones are put forward. The game models of new mechanisms are made and the equilibrium solution of every game model is figured out. The equilibrium price of each mechanism is used to estimate market power of the mechanism. According to analyses and evaluation in actual example, we can find the trade mechanism of non-cooperative competition and the deal mechanism of Forchheimer competition always contribute to the decrease of market price and the control of market power. Therefore, it's an effective way to control market power by cultivating competitive market mechanism, which can be avail to improve the efficiency of competition.6. This thesis designs a sub-optimal principal-agent contract used to regulate the market power in electric power market basing on the principal-agent mechanism in the...