IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v22y2001i8p411-429.html
   My bibliography  Save this article

Modeling regional electric power markets and market power

Author

Listed:
  • Robert F. Cope III

    (Department of Management, Southeastern Louisiana University, Hammond, LA, USA)

  • David E. Dismukes

    (Center for Energy Studies, Louisiana State University, Baton Rouge, LA, USA)

  • Rachelle F. Cope

    (Department of Management, Southeastern Louisiana University, Hammond, LA, USA)

Abstract

This paper develops a nonlinear, mathematical programming model for estimating production decisions in an open access, regional power market. Our approach allows one to estimate competitive power market equilibrium prices, which in turn offers empirical conclusions about marginal generation facilities, transmission interconnection congestion, and most importantly, load pockets and market power. Sensitivity analyses are conducted by subjecting the model to changes in production costs, peak hour demand, power imports, and transmission interconnection price assumptions. We then consider the issue of a firm's ability to exercise market power and the implications it may have on regional equilibrium power prices. The Louisiana power market is used as a case study for our work. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Robert F. Cope III & David E. Dismukes & Rachelle F. Cope, 2001. "Modeling regional electric power markets and market power," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(8), pages 411-429.
    • Handle: RePEc:wly:mgtdec:v:22:y:2001:i:8:p:411-429
    DOI: 10.1002/mde.1031
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1031
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lucas, Nigel & Taylor, Peter, 1993. "Characterizing generator behaviour: bidding strategies in the pool: A game theory analysis," Utilities Policy, Elsevier, vol. 3(2), pages 129-135, April.
    2. Dismukes, David E. & Cope III, Robert F. & Mesyanzhinov, Dmitry, 1998. "Capacity and economies of scale in electric power transmission," Utilities Policy, Elsevier, vol. 7(3), pages 155-162, November.
    3. Edward Kahn & Ross Baldick, 1994. "Reactive Power is a Cheap Constraint," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 191-202.
    4. Dennis Anderson, 1972. "Models for Determining Least-Cost Investments in Electricity Supply," Bell Journal of Economics, The RAND Corporation, vol. 3(1), pages 267-299, Spring.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berna Tektaş & Hasan Hüseyin Turan & Nihat Kasap & Ferhan Çebi & Dursun Delen, 2022. "A Fuzzy Prescriptive Analytics Approach to Power Generation Capacity Planning," Energies, MDPI, vol. 15(9), pages 1-26, April.
    2. Richard O’Neill & Emily Fisher & Benjamin Hobbs & Ross Baldick, 2008. "Towards a complete real-time electricity market design," Journal of Regulatory Economics, Springer, vol. 34(3), pages 220-250, December.
    3. Axel Pierru, 2007. "Short-run and long-run marginal costs of joint products in linear programming," Recherches économiques de Louvain, De Boeck Université, vol. 73(2), pages 153-171.
    4. Davi-Arderius, Daniel & Schittekatte, Tim, 2023. "Carbon emissions impacts of operational network constraints: The case of Spain during the Covid-19 crisis," Energy Economics, Elsevier, vol. 128(C).
    5. Kishore, T.S. & Singal, S.K., 2014. "Optimal economic planning of power transmission lines: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 949-974.
    6. Madlener, Reinhard & Kumbaroglu, Gurkan & Ediger, Volkan S., 2005. "Modeling technology adoption as an irreversible investment under uncertainty: the case of the Turkish electricity supply industry," Energy Economics, Elsevier, vol. 27(1), pages 139-163, January.
    7. Llorca, Manuel & Orea, Luis & Pollitt, Michael G., 2016. "Efficiency and environmental factors in the US electricity transmission industry," Energy Economics, Elsevier, vol. 55(C), pages 234-246.
    8. repec:dui:wpaper:1305 is not listed on IDEAS
    9. Foley, A.M. & Ó Gallachóir, B.P. & Hur, J. & Baldick, R. & McKeogh, E.J., 2010. "A strategic review of electricity systems models," Energy, Elsevier, vol. 35(12), pages 4522-4530.
    10. Güner, Yusuf Emre, 2018. "The improved screening curve method regarding existing units," European Journal of Operational Research, Elsevier, vol. 264(1), pages 310-326.
    11. Llorca, Manuel & Orea, Luis & Pollitt, Michael G., 2014. "Using the latent class approach to cluster firms in benchmarking: An application to the US electricity transmission industry," Operations Research Perspectives, Elsevier, vol. 1(1), pages 6-17.
    12. Kim, Hansung & Lee, Hwarang & Koo, Yoonmo & Choi, Dong Gu, 2020. "Comparative analysis of iterative approaches for incorporating learning-by-doing into the energy system models," Energy, Elsevier, vol. 197(C).
    13. Andreas Ehrenmann & Yves Smeers, 2011. "Generation Capacity Expansion in a Risky Environment: A Stochastic Equilibrium Analysis," Operations Research, INFORMS, vol. 59(6), pages 1332-1346, December.
    14. Esther Jose & Puneet Agarwal & Jun Zhuang, 2023. "A data-driven analysis and optimization of the impact of prescribed fire programs on wildfire risk in different regions of the USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 118(1), pages 181-207, August.
    15. Arnold Rivasplata R. & Raúl García C., 2018. "Dinámica de inversión y competencia en generación eléctrica en un escenario de liberalización en el Perú: La importancia de los contratos de largo plazo," Documentos de Trabajo / Working Papers 2018-457, Departamento de Economía - Pontificia Universidad Católica del Perú.
    16. Byoung-Kuk Ju & Seung-Hoon Yoo & Chulwoo Baek, 2022. "Economies of Scale in City Gas Sector in Seoul, South Korea: Evidence from an Empirical Investigation," Sustainability, MDPI, vol. 14(9), pages 1-14, April.
    17. Timo Lohmann & Michael R. Bussieck & Lutz Westermann & Steffen Rebennack, 2021. "High-Performance Prototyping of Decomposition Methods in GAMS," INFORMS Journal on Computing, INFORMS, vol. 33(1), pages 34-50, January.
    18. Ramos, Andres & Ventosa, Mariano & Rivier, Michel, 1999. "Modeling competition in electric energy markets by equilibrium constraints," Utilities Policy, Elsevier, vol. 7(4), pages 233-242, February.
    19. Jorge Barrientos Marin & Hector Gomez Marin, 2022. "Oligopoly and Collusion in the Colombian Electricity Market," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 125-134, May.
    20. Avetisyan, Misak & Bayless, David & Gnuni, Tigran, 2006. "Optimal expansion of a developing power system under the conditions of market economy and environmental constraints," Energy Economics, Elsevier, vol. 28(4), pages 455-466, July.
    21. Hobbs, Benjamin F., 1995. "Optimization methods for electric utility resource planning," European Journal of Operational Research, Elsevier, vol. 83(1), pages 1-20, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:22:y:2001:i:8:p:411-429. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.