Analysis Of Withholding And Tacit Collusion Behavior Of Power Suppliers

The worldwide restructuring and deregulation of electric power industry has been directed at encouraging the competition between the electricity suppliers and breaking the monopoly existing in the electricity market. Electricity pricing method is the key problem in power system restructuring. A scientific and reasonable pricing method should lead the market on to arrive at the balance of demand and supply for both short term and long term and lead to effective use of electricity resource. However, because of the particularity of electric power system, the real electricity market is not a perfect competitive market but rather a local oligarchic one and the power suppliers always attempt to obtain extra more, even colossal, profits by strategic bidding, resulting in large reduction of the market efficiency and consumer surplus. In this dissertation, the pool purchase pricing methods in electricity market and bidding strategies of power suppliers are studied. Four sub-issues will be addressed.Firstly, a game model is presented, describing how the uniform pricing method facilitates suppliers to withhold their supply capacity in the wholesale electricity markets in order to raise the clearing price. Under some conditions, the solution of the Nash equilibrium of this game can be analytically given. Then a multi-level- forewarning method is developed to monitor the withholding risk in electricity market. And is also proposed the load demand levels, as the real load is higher than which the forewarning works. Then another extended capacity withholding model is proposed to take into account the electric supply elasticity and the demand elasticity as well as the other factorsSecondly, an asymmetric supplier game model is presented, in which the suppliers use mixed strategy to form tacit collusion under the environment of uniform pricing method. Under the condition that every supplier's capacity can not solely satisfy the market load demand, the suppliers may use mixed strategy to form tacit collusion in the market .The probability of having the market clearing price at the price cap and the expected payoff as well as the expected payoff per unit capacity of the power suppliers are analyzed. Effect on taking shape of tacit collusion is analyzed as the capacity difference of the suppliers change. The conclusion is that suppliers will form tacit collusion more probably when they have nearly the same capacity.Thirdly, it is pointed out that in the case of repeated bidding the uniform clearing pricing system facilitates the tacit collusion of suppliers. A tacit collusion model is presented for multi-unit bidding in repeated uniform clearing pricing auction in electric power market. An unnecessarily symmetric N-player Forehheimer model is used to analyze supplier's market behavior in forming the tacit collusion. The necessary condition for the occurring of tacit collusion is presented and the internal and external stability issues of this collusion are discussed in the electricity market. The result shows that under given load environment the market may finally become that several suppliers satisfy some conditions to form a stable tacit collusion so as to control the clearing price or become that only one supplier has strong enough market power to control the clearing price. In either case the clearing price will be much...