| To address the emergence of electricity systems and environmental regulations that have been restructured based on market forces, we have created ELEMCOMP, a complementarity programming model of combined electricity generation and emissions competition. ELEMCOMP is a single-stage, deterministic, n-player, multi-product, multi-resource, emissions-based system model of oligopolistic competition in electricity generation and emissions permits markets. There are two formulations of ELEMCOMP, one in which there is an exogenously determined permit quantity and one in which permit quantity is determined by competition amongst two permit suppliers with quadratic cost functions. Imperfect competition is modelled with conjectural variations. Four primary measures of the interacting markets that we emphasise in the case studies are emissions reductions, prices, the profitability of retrofitting coal facilities to reduce emissions, and generation mix. The case studies are annual models of a regional system resembling markets in Ontario. |
