| 来源类型 | Article
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| 规范类型 | 其他
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| DOI | 10.1007/s11067-017-9338-1
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| Network Expansion to Mitigate Market Power. |
| Zerrahn A
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| 发表日期 | 2017
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| 出处 | Networks and Spatial Economics 17 (2): 611-644
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| 出版年 | 2017
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| 语种 | 英语
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| 摘要 | Constrained transmission capacity in electricity networks may give generators the possibility to game the market by specifically causing congestion and thereby appropriating excessive rents. Investment in network capacity can ameliorate such behavior by reducing the potential for strategic behavior. However, modeling Nash equilibria between generators, which explicitly account for their impact on the network, is mathematically and computationally challenging. We propose a three-stage model to describe how network investment can reduce market power exertion: a benevolent planner decides on network upgrades for existing lines anticipating the gaming opportunities by strategic generators. These firms, in turn, anticipate their impact on market-clearing prices and grid congestion. In this respect, we provide the first model endogenizing the trade-off between the costs of grid investment and benefits from reduced market power potential in short-run market clearing. In a numerical example using a three-node network, we illustrate three distinct effects: firstly, by reducing market power exertion, network expansion can yield welfare gains beyond pure efficiency increases. Anticipating gaming possibilities when planning network expansion can push welfare close to a first-best competitive benchmark. Secondly, network upgrades entail a relative shift of rents from producers to consumers when congestion rents were excessive. Thirdly, investment may yield suboptimal or even disequilibrium outcomes when strategic behavior of certain market participants is neglected in network planning. |
| 主题 | Energy (ENE)
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| 关键词 | Market power
Electricity transmission
Network expansion
Generalized Nash equilibrium (GNE
Mixed-integer equilibrium
problem under equilibrium constraints (MI-EPEC)
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| URL | http://pure.iiasa.ac.at/id/eprint/14394/
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| 来源智库 | International Institute for Applied Systems Analysis (Austria)
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| 引用统计 |
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/131104
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推荐引用方式
GB/T 7714 |
Zerrahn A. Network Expansion to Mitigate Market Power.. 2017.
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