A method for identifying market power

An ability to exercise market power by suppliers may significantly reduce market efficiency in restructured electricity markets. Many studies have been performed to develop an effective tool to identify market power based on indices. Most often it is rather difficult to use an index-based method for real-time analysis. This paper provides a method to identify market power that can be used in real time. The purpose is to analyze price-dispatch sensitivity to determine whether there is a generator or a subset of generators that have the ability to increase its own price profitably. Case studies performed on a modified IEEE 118-bus system are presented.

► Development of a real-time market monitoring tool
► Definition of two types of market power in terms of the impact on the dispatches
► Theoretical derivation on how to detect the origin of market power.