Derivatives of the nodal prices in market power screening

Piotr Pałka

Energy Economics, 2017, vol. 64, issue C, 149-157

Abstract: This paper proposes a novel method for market power screening. This method is developed for horizontally and vertically consolidated power markets, and is based on the optimal power flow (OPF) model properties. It undertakes the calculation and analysis of a matrix of derivatives of the nodal prices with respect to generating unit offer prices. The analysis takes into consideration the influence of particular partakers and energy groups on the nodal prices. This paper presents a theoretical analysis of the partakers' and groups' profits as well as a method for the market power screening. Moreover, the issue wherein the LMP model generates prices above the highest bidding price is discussed. Illustrative case studies and case studies based on the Polish wholesale balancing power market model are also presented.

Keywords: Optimal power flow; Market power; Wholesale balancing market; Derivative matrix (search for similar items in EconPapers)
JEL-codes: C02 C61 C65 D43 L40 Q43 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:64:y:2017:i:c:p:149-157

DOI: 10.1016/j.eneco.2017.03.019

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