Competition in Power Generation: Ex-ante Analysis of Indonesia’s Electricity Market

Dzikri Firmansyah Hakam, Sudarso Kaderi Wiyono and Nanang Hariyanto
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Sudarso Kaderi Wiyono: School of Business and Management, Institut Teknologi Bandung, Bandung 40132, Indonesia
Nanang Hariyanto: School of Electrical Engineering and Informatics, Institut Teknologi Bandung, Bandung 40132, Indonesia

Energies, 2020, vol. 13, issue 24, 1-20

Abstract: This research optimises the mix and structure of Generation Companies (GenCos) in the Sumatra power system, Indonesia. Market power, indicating the ability to raise prices profitably above the competitive level, tends to be a significant problem in the aftermath of electricity market restructuring. In the process of regulatory reform and the development of competitive electricity markets, it is desirable and practical to establish an efficient number of competitor GenCos. Simulations of a power system account for multi-plant mergers of GenCos subject to a regulatory measure of the Residual Supply Index and the influence of direct current load flow and the topology of the system. This study simulates the Sumatra power system in order to determine the following: optimal market structure, efficient GenCo generation mix, and the optimal number of competitive GenCos. Further, this study seeks to empirically optimise the electricity generation mix and electricity market structure of the Sumatra power system using DC load flow optimisation, market power index, and multi-plant monopoly analysis. The simulations include generation and transmission constraints to represent network constraints. This research is the first to analyse the Sumatra power system using imperfect (Cournot) competition modelling. Furthermore, this study is the first kind to optimise the mix and structure of the Sumatra generation power market. The guidelines and methodology in this research can be implemented in other countries characterised by a monopoly electricity utility company.

Keywords: competitive market; generation companies; market power; market restructuring; DC load flow; Cournot competition (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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