Research About Market Power In Electricity Market

The power industry worldwide is experiencing unprecedented restructuring for breaking traditional monopoly, introducing competition, depressing electricity price, improve efficiency and establishing electricity markets. Many successful and failed experiences have been attained in the worldwide electricity market. Based on these examples, the power industry in China started restructuring in the late 2002 and generation markets were expected to be established. In the new electricity market environments, generation companies focuses on acquiring the largest profits. Because of the self-characteristic of electricity market, speculations of electricity market members could weaken the equitableness of competetion, and endanger the power system stabilization. Hence, in order to supervise and manage the market members' behavior, it is necessary to study the market power of generation companies. This dissertation focuses on the research of the formation cause of the market power, its implement, and the indices to evaluate market power of each member in the electricity market, and how to prevent from abusing market power.First, a comprehensive introduction of reviewing development of theories and practices about the electricity market is made. While the research work of this paper is proposed, the correlative economics theory is given.Secondly, based on the recently research work in market power, the factors which influence the market power are summarized. Thirdly, taking into consideration that generation companies put the market power in pratice by politic bidding, this thesis studies optimal bidding strategies for generation companies. Rival bidding behaviors are described by normal distribution function, and the problem of building the optimal bidding strategy for a generation company is then formulated as a stochastic optimazation problem, and solved by a Monte Carlo approach and Enhanced Particle Swarm Optimization. Fourthly, based on the traditional theory about market power, a novel method is proposed to calculate each generator's Lerner index, which is one of the most important indices to evaluate market power of each generator in electricity market. Using this method, a independent system operator can conveniently and accurately caculate each generator's Lerner index without their marginal cost information and only with each participant's supply (demand) function and market spot exchange information. The indices figured out by this method provide comprehensive dynamic information of market variation, simplify the supervisory methods, and make the monitor and control measures of market power more efficient, measurable and preventive.Fifthly, based on the formation cause of market power and control measures, the emphasis is put on the transmission congestion management in this part. This section studies transmission congestion's influence on the cause of generators' market power in electricity. A novel pricing method used to avoid transmission congestion is presented. Electricity-tracing method is applied. And the consumers' demand elasticity impact on the transmission congestion is considered. Based on the theory, the price is calculated in behalf of consumers. Finally, some conclusions about this dissertation are made and the further work is pointed out as well.