A comparison of NMRS with other market power indices in deregulated electricity market

Abstract

Assessment of market power becomes an important issue when more than one firm/supplier and buyer enters the market. As the electricity market has moved from the conventional bundled system to the deregulated environment, the market power assessment has become vital. Most of the researchers have used Herfindahl-Hirschman Index (HHI) and must-run share (MRS) as an index in their literatures for determining the market power of a generation company. In this paper, a comparative study is made on the market power indices such as HHI, MRS with nodal must-run share (NMRS) under various system constraints such as generation and transmission line outages, and loading conditions. To illustrate and for better understanding, IEEE 24-bus reliability test system (RTS) is taken for which the indices are calculated and compared. It is found that NMRS reflects the complete information about the generation company’s market power on any load at any bus. All simulations are carried out using MATLAB (R2009a) version.