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2003•2002 IEEE Power Engineering Society Winter Meeting. Conference Proceedings (Cat. No.02CH37309)Requires access

The impact of transmission on imperfect electricity competition

Z. Yu, F.T. Sparrow, Douglas J. Gotham, Forrest D. Holland, D.G. Nderitu, Thomas L. Morin

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Abstract

This paper investigates the impact of transmission networks on imperfect competition in deregulated electricity markets. Electricity producers are assumed to engage on a noncooperative gaming with complete but imperfect information. The problem is formulated as a vector profit optimization model. It shows that increasing wheeling charges can both increase market prices and reduce producers' profits, a phenomenon that cannot be explained by a nonspatial framework. Transmission limits have a significant impact on outcomes of market gaming, indicating that reducing transmission congestion would mitigate market power.

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What this paper is about

This paper investigates the impact of transmission networks on imperfect competition in deregulated electricity markets. Electricity producers are assumed to engage on a noncooperative gaming with complete but imperfect information. The problem is formulated as a vector profit optimization model. It shows that increasing wheeling charges can both increase market prices and reduce producers' profits, a phenomenon that cannot be explained by a nonspatial framework. Transmission limits have a significant impact on outcomes of market gaming, indicating that reducing transmission congestion would mitigate market power.

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OpenAlex reports 11 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This paper investigates the impact of transmission networks on imperfect competition in deregulated electricity markets. Electricity producers are assumed to engage on a noncooperative gaming with complete but imperfect information. The problem is formulated as a vector profit optimization model. It shows that increasing wheeling charges can both increase market prices and reduce producers' profits, a phenomenon that cannot be explained by a nonspatial framework. Transmission limits have a significant impact on outcomes of market gaming, indicating that reducing transmission congestion would mitigate market power.

Key concepts: Wheeling, Imperfect competition, Electricity market, Imperfect, Electricity, Profit (economics), Perfect competition, Market power

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